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Malaysian economy needs RM45b stimulus to stave off recession, says ex-finance minister
KUALA LUMPUR, Aug 20 ― DAP secretary-general Lim Guan Eng has said Putrajaya should not penny-pinch when it comes to injecting more money into the economy to help those affected by the Covid-19 pandemic.
He urged the government to consider another round of economic stimulus worth at least RM45 billion to prevent the country from slipping into recession.
“There is no reason for the federal government to be so stingy about injecting an additional RM45 billion, when there is sufficient liquidity in the domestic debt market of RM1.6 trillion to sustain such borrowings.
“The total RM90 billion fund injection from the additional RM45 billion is not significant, compared to Singapore’s S$108 billion (RM329 billion) stimulus package,” Lim said in a statement today.
He added that a recent survey conducted by the Federation of Malaysian Manufacturers and Malaysian Institute of Economic Research (FMM-MIER) showed 41 per cent of Malaysia’s manufacturing industry won’t be able to sustain themselves beyond 12 months.
He said manufacturing makes up 21 per cent of Malaysia’s gross domestic product (GDP) and comprised 80 per cent of total exports in 2019.
“With the International Monetary Fund predicting a global economic contraction of 4.9 per cent this year, the additional RM45 billion fund injection, moratorium of bank loans, energy discounts and wage subsidies are crucial for local businesses to survive and prevent unemployment from exceeding one million,” added Lim.
“Failure to do so may lead to job losses, business closures in a year’s time and cause untold hardship to the people. By then, even if the government injects an additional RM45 billion fund injection, it will be too little too late.”
Previously, Lim, the former finance minister under the Pakatan Harapan government, stated that a fiscal deficit of 9 per cent of the GDP would be tolerable.
He added that this would not be the worst deficit on record, pointing out that this happened in 1982, at 16.6 per cent, and in 1981, at 15.6 per cent of the GDP.
Source: https://www.malaymail.com/news/malaysia/2020/08/20/malaysian-economy-needs-rm45b-stimulus-to-stave-off-recession-says-ex-finan/1895554