With the nationwide vaccination campaign
in progress, things might start looking up for businesses according to Star
Report on Wednesday, 17 March 2021.
While Malaysia’s gross domestic product
(GDP) will likely contract in the first quarter owing to the second movement
control order (MCO 2.0), the overall impact will be less severe compared to the
first MCO last year.
For comparison, the government estimates
daily economic losses during MCO 1.0 to be around RM2.4bil but for MCO 2.0, it
is gauged to be around RM70mil a day.
World Bank Group macroeconomics, trade
and investment global practice lead economist Richard Record said the bulk of
global vaccine deployment will be completed this year in most economies, leading
to strong recovery and demand, as well as boosting trade and commodity prices.
Although he projected global growth of
4.0% and between 5.6% and 6.7% for Malaysia, he noted that there are risks to
growth that are linked to the Covid-19 pandemic, such as any unexpected delays
in vaccine rollout.
AmBank Research expects Malaysia’s GDP
growth to hover at 5.2% and 5.9% with Maybank Investment Bank Research
maintaining its 5.1% projection and Fitch Solutions revising its forecast from
10.0% to 4.9%.
Despite the positive growth outlook,
that does not mean the year will be smooth sailing for businesses, especially
small and medium enterprise (SMEs). These businesses continue to grapple with
the aftershocks form the MCO 1.0 and MCO 2.0 period.
Cash flow, as always, remains a core
worry for smaller businesses. A survey by the Associated Chinese Chambers of
Commerce and Industry of Malaysia revealed that SMEs cannot survive for more
than three months with zero cash flow.
Among the initiatives that have
alleviated the pinch is the RM2bil National Economic Recovery Plan (Penjana)
SME Financing scheme.
The government has approved nearly 7,000
applications with a total loan value approximating RM1.32bil, prioritising SMEs
that have not previously received bank loans.
As for Penjana Micro Credit Financing, a
total of RM391.9mil has been channelled to 11,708 micro-SMEs, while Perbadanan
Usahawan Nasional’s RM200mil Bumiputera Relief Financing has benefited 641 SMEs
with total funding of RM182.8mil as at Feb 26.
With MCO 2.0 not a full lockdown, SMEs
that have survived were still able to generate enough income to scrape by.
That said, even with hope on the
horizon, there is no denying that there are still more obstacles to come for
SMEs, which will have to persevere and innovate to not only survive but have
sustained growth.
The fear of shutdown still looms. It is
best to be reminded that is just 6 months (March-September 2020) over 32,000
SMEs were shut. Why? Cashflow, cashflow, cashflow! No business can survive
indefinitely if products/ services are not sold or purchases are deferred. But
hopefully, we will see better times by second half of 2021.
Reference:
1.
Cautious
optimism for 2021, 17 March 2021, The Star
2.
Pemerkasa:
Something all can look forward to, 18 March 2021, The Star
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