KUALA LUMPUR — Prime Minister Muhyiddin Yassin said on Friday that Malaysia aims to spend 250 billion ringgit (58.2 billion US dollars) to counter the health and economic impacts of the coronavirus pandemic.
Speaking on national television, Muhyiddin said the “people’s economic stimulus package will benefit everyone.”
With the economy at a standstill since a lockdown was imposed by the government on March 18, the prime minister pledged around a third of the funds to support hard-pressed businesses and promised one-off cash payouts to a range of groups, including unmarried low-income earners, pensioners and bottom-tier civil servants.
A recent dip in prices for export commodities such as palm oil could leave Malaysia hard-pressed find the money to pay for its mammoth stimulus, which equates to just under a sixth of the country’s estimated 370-billion-dollar gross domestic product (GDP).
As Southeast Asia’s only net oil and gas exporter, and with hydrocarbons making up 10-11 per cent of GDP, Malaysia is vulnerable to shrinking global demand due to a pandemic that infected around a half a million people.
With the government banning all visitors as part of its lockdown, Malaysia’s tourism sector, which is worth around 7 per cent of GDP, has also been hard hit, said ANZ Research, part of the Australia and New Zealand Banking Group, in a report published on Friday.
“Another contributing factor is the much dimmer prospects for private consumption, historically the key growth driver for Malaysia, given the imposition of a partial lockdown in the country for a month,” said Fitch Solutions in another Friday report.
One month ago, when Malaysia’s coronavirus infections stood at 22 and the global total was under 83,000, caretaker prime minister Mahathir Mohamad announced a first stimulus package worth 4.75 billion dollars.
Over the intervening weeks, Malaysia’s number of reported cases surged to 2,161 as of 5pm Friday, when the Health Ministry announced a 26th death linked to Covid-19, the respiratory illness caused by the new coronavirus.
Over half of Malaysia’s fatalities and infections have been linked to an Islamic ceremony held in Kuala Lumpur’s outskirts that started the day before Mahathir’s initial fiscal outlay was announced.
The expanded outlay announced on Friday tops the 38-billion-dollar spend announced by neighbouring Singapore the day before and vastly exceeds the stimulus proposed by Indonesia, which has a gross domestic product of around a trillion dollars but so far is allocating around 8 billion to counter the effects of the pandemic.Show