The government is finalising the economic stimulus package for it to be implemented immediately, Economic Affairs Minister Datuk Seri Mohamed Azmin Ali said.
“The government will also ensure development projects for 2020, as well as new initiatives under the economic stimulus package to be introduced at the end of February 2020 be implemented immediately,” he said in a press statement yesterday.
Azmin also said the economic stimulus package is aimed at reducing the impact of the Covid-19 outbreak, which has disrupted global supply chains.
He singled out tourism, transportation and manufacturing as sectors that will be directly affected by Covid-19.
“To reduce these negative impacts, the government is taking proactive steps to further boost domestic economic activities besides continuing to encourage exports, especially of healthcare, electrical and electronics, and palm oil-based products.
“The government will continue to monitor current developments to ensure economic growth remains strong besides guaranteeing the security, health and wellbeing of the people,” he said.
Azmin’s statement came a day after Bank Negara Malaysia (BNM) announced that Malaysia’s economy grew 3.6% in the fourth quarter of 2019 (4Q19).
It is the country’s lowest performance since the global financial crisis due to supply disruption in the agriculture and mining sectors.
“Growth was affected by the challenging external environment, disruptions in commodity-related sectors and contraction in public investment activity,” BNM governor Datuk Nor Shamsiah Mohd Yunus said on Wednesday.
Azmin said the moderation of economic growth follows the global growth slowdown due to the weakness in global trading activities.
Malaysia’s economic performance for 2019, he said, was better compared to several countries in the region that recorded lower growth.
“This trend is also seen as being in line with growth in other Asian countries.”
The moderation in growth this time around was mainly due to the contraction of the agriculture sector as a result of the uncertain weather and reduced fertiliser application early this year, which had affected oil palm production, he added.
“The mining sector also contracted, but at a lower pace following production recovery at several plants which had been temporarily closed for scheduled maintenance works in the previous quarter,” he added.
Growth in 4Q19 was supported by encouraging domestic demand, especially private consumption which expanded by 8.1% compared to the 7% in the previous quarter.
“Private investment also recorded better growth at 4.2% compared to 0.3% in the preceding quarter. The services, manufacturing and construction sectors contributed to this growth,” he said.
He noted that the country’s international reserves position is still strong at RM424.1 billion, sufficient to finance 7.5 months of retained imports. Foreign direct investment also continued to record net inflows of RM32.8 billion against RM32.6 billion in 2018.