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Malaysia unveiled a 15 billion ringgit ($3.7 billion) in new assistance package to help the economy weather the impact from a fresh surge in coronavirus cases.
The plan — the first stimulus the government has announced this year — helps bolster the measures in place to help people blunt the economic impact of the pandemic, Prime Minister Muhyiddin Yassin said in a televised address Monday.
The measures come a week after Malaysia declared a state of emergency, allowing the government to enact immediate laws to contain the pandemic and support the economy. The move hasraised concerns about a potential negative impact on market stability and the investment climate.
Malaysia is experiencing a fresh surge of Covid infections that has stretched its health system to the breaking point. The country recorded a record 4,029 cases Saturday and doesn’t expect to flatten the infection curve until May. The nation’s immunization plan is on track, with the first batch of vaccines set to rollout in early March, Muhyiddin said.
The emergency, which could last until Aug. 1, coincides with a two-week lockdown against the virus that led analysts to shave as much as 1.5 percentage points off their gross domestic product forecasts for this year. While the government has said the economy will grow as much as 7.5% this year, regions under the new stay-at-home orders contribute more than two-thirds of GDP.
READ: Emergency Declaration to Drag on Malaysia’s Economic Rebound
The economy shrank in the second and third quarters of 2020 — fourth-quarter data isn’t out yet — and the government was expecting the economy to contract 4.5%-to-5.5% for all of last year.
The government has announced 305 billion ringgit in total stimulus measures, or more than 20% of GDP, Muhyiddin said on Monday. The previous measures included 55 billion ringgit of direct stimulus, he said.
Highlights of the premier’s address include:
- The government to extend tax relief for covid-19 tests
- To expedite cash aid for 11.1 million recipients of the handout
- Cab, bus drives to get one-off cash aid of 66 million ringgit
- Tax break for phone, laptop purchases extended to Dec. 31
- Tax exemption on locally-assembled cars extended to June
- The government set aside 2.2 billion ringgit for special charity
- All employers can apply for wage subsidy program
— With assistance by Clarissa Batino
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