The reopening of more economic sectors in Malaysia proved to have a positive effect on the country’s economy. The latest figures showed that the country currently loses an average of RM300 million every day. This amount pales in comparison to the RM2.4 billion per day that the country lost at the peak of the Movement Control Order (MCO). These losses occurred last year.
According to Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz, the current MCO regulations which permit the operation of more economic sectors provide much benefit to Malaysia’s economy. These regulations facilitate a balance between general public health and the economic well-being of the country.
Malaysia’s Current Economic Status
As part of his opening remarks at the virtual 25th Revenue Day of the Inland Revenue Board (IRB), Tengku Zafrul said, “During the first MCO, our country suffered a loss of RM2.4 billion a day. (If its restrictions had been implemented for too long,) our country’s economic system, including the public health system, (would have stalled).”
Tengku Zafrul also mentioned that world-renowned credit rating agency Moody’s took note of the government’s efforts to curb the spread of Covid-19. In January, Moody’s placed Malaysia’s credit rating at A3 with stable projections. Commenting on Moody’s expectations for Malaysia, Tengku Zafrul said, “Moody’s also expects the Covid-19 pandemic not to have a long-lasting effect on the country’s economic structure. Therefore, the current and subsequent waves of contagion will only delay but not hinder the country’s economic recovery towards a (more rapid) and sustainable growth path.”
According to Tengku Zafrul, some of the reasons why the country received a favourable rating from Moody’s include Malaysia’s stable and firm economic foundation as well as diversification measures which its various economic sectors undertook. These actions highlighted good fiscal discipline on the part of the government as well as businesses and their owners.
In addition, Tengku Zafrul said that the ratio of Covid-19 deaths to population in Malaysia is at just 0.3%. This figure places the country’s ratio in the lowest 5% of all countries in the world. He went on to state that the more effectively the Covid-19 pandemic is curbed in Malaysia, the better the country’s economic condition will become. This is because it would result in a recovery in demand levels.
The Condition of Malaysia’s GDP
Tengku Zafrul concluded by saying that despite Malaysia’s gross domestic product (GDP) contraction of 5.6% in 2020, the country’s economy nevertheless outperformed expectations during that pandemic-stricken year. Organizations such as the World Bank, International Monetary Fund, and Asian Development Bank all expected Malaysia’s economic losses to exceed their actual level.
Furthermore, Malaysia’s economy performed better than did those of most other Southeast Asian countries in 2020. As examples, the GDP of Thailand contracted by 6.1%, while that of the Philippines did so by 9.5%.
2nd March 2021 15:46
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