Source: The Straits Times
MIER
warned that with the MCO extended to April 14, 2020, Malaysia’s GDP may shrink
by 2.9% for 2020. That will result in 2.4 million jobs lost and perhaps a
million SMEs closing shop. Any further two weeks extension then a contraction
of 3-4% is possible. These are MIER’s analysis and present estimates.
Household
incomes may fall 12% relative to 2020 baseline and that amounts to RM95
billion. Consumer spending will fall by 11%, even though CPI drops by 4.4%.
MIER
suggests a stimulus level of RM95 billion (this includes the RM20 billion
package announced by PH) but falls short of how this is secured and settled
eventually. It however suggests that the Perikatan Government re-introduces GST
in the 2021 Budget. MIER also suggested a National Food Reserve and a Medical
Supplies Reserve to meet future eventualities. With the proposed stimulus, MIER
expects a V-shaped recovery in 2021.
Singapore
now sees 2020 GDP contraction of 1%-4%. GDP fell 10.6% in first quarter from
previous three months. Purchasing managers surveys were already showing severe
contractions in global output at the beginning of this year. More current
figures will show situation is even worse.
The
Singapore Government is expected to unveil a new stimulus package later today
(26 March). There is good probability the Government will dip into its reserves
to fund the stimulus. This should cover cashflow, rental and overheads over a
period.
What
can we learn?
Malaysia has
released a new stimulus package on 27 March, 2020 with cash infusion of RM25
billion. Is that enough? No, we need RM45 billion – RM75 billion cash injection
for various initiatives. We could learn from Singapore and U.S. Also, hear out
businesses and Associations on their needs. In times like this even the strong
grow weaker, what more those who are vulnerable.
Reference:
1. Emir Zainul, Malaysia will face
recession if partial lockdown extended, MIER warns, 24 Mar 2020, The Edge
2. Michelle Jamrisko, Singapore’s Economy
Plunges in Early Sign of Pain in Asia, 25 Mar 2020, Bloomberg
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