KUALA LUMPUR — Malaysian business has been hammered by a lockdown imposed in mid-March to try contain the new coronavirus pandemic, according a government survey released on Friday.
Some 42.5 per cent of the 4,094 companies canvassed by the Department of Statistics said they will need at least six months to recover from the restrictions, which until Monday required people to stay at home unless buying essentials or commuting to work.
Only 27 per cent of businesses said they expect to recover within three months of the restrictions being lifted.
With 67 per cent of the businesses reporting no sales or income during the lockdown, the same percentage said they needed tax relief to survive, with 83 per cent seeking subsidies.
Malaysia’s retail sales fell 5.7 per cent to a seven year low in March, the department reported separately, with unemployment climbing 17 per cent year-on-year to reach 3.9 per cent.
The country’s chief statistician Mohd Uzir Mahidin put the joblessness spike down to the “adverse impact of the Movement Control Order on the labour market,” referring to the official order for the country’s lockdown.
While wider sales and employment declines are set to be steeper in April, which was a full month of lockdown, Malaysia’s rubber production will likely rebound from the 23 per cent decline in March reported by the Statistics Department on Friday.
Malaysian factories make around two-thirds of the world’s rubber gloves – an output that includes potentially life-saving protective gear needed by front line medics.
Citing concerns that supply could dry up, local manufacturers and foreign governments appealed successfully to Malaysian authorities to allow the rubber sector run at full tilt – after it was initially restricted by the lockdown imposed on March 18.
The lockdown was strictly enforced at checkpoints and roadblocks, with more than 21,000 arrests made for alleged breaches – further discouraging whatever consumer spending was viable during the restrictions.
A looming recession helped prompt the government to lift some curbs on Monday, as did falling new case numbers of Covid-19, the disease caused by the new coronavirus. 4,776 of the total 6,467 cases are listed by the Health Ministry as recovered. There have been 107 deaths.
Restaurants are permitted to cater to dine-in customers and most businesses are re-opening. However schools and places of worship cannot re-open and mass gatherings are banned. Malaysia’s border remains closed.
In announcing the loosening, Prime Minister Muhyiddin Yassin said a week ago that Malaysia’s economy was losing around a half a billion dollars a day due to the pandemic and related containment measures.
Malaysia’s central bank – which cut the benchmark interest rate by 0.5 per cent to 2 per cent on Tuesday in an attempt to partially offset wider economic losses – has warned that gross domestic product could shrink by 2 per cent in 2020.
Analysts predict much worse, with British consultancy Capital Economics suggesting a 5 per cent contraction looms. Dutch bank ING said on Friday that Malaysia’s first quarter decline alone could be around 4 per cent, in part due to the worldwide slump in tourism.
A net energy exporter, Malaysia has also been hit hard by the recent temporary slump into negative territory of oil prices, while its trade in other lynchpin commodity exports such as palm oil have plummeted in early 2020.
The government’s handling of the pandemic and the ensuing economic whammy is likely to be targeted by the opposition when Malaysia’s parliament convenes for a day on May 18 – when former premier Mahathir Mohamad aims to topple incumbent Muhyiddin with a no-confidence vote.Show