12MP signals government’s seriousness in overcoming pandemic, say economists
27 Sep 2021
The tabling of the 12th Malaysia Plan (12MP) signals the government’s seriousness in ensuring that the country fully recovers from the pandemic, said economists.
Bank Islam Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid noted that the country had gone through various economic problems before the onset of the pandemic, especially the US-China trade war.
“The pandemic brought the country’s economic problems into focus. The 12MP should be used as an opportunity to reset the economy,” he said on a Bernama TV special programme on the 12MP.
For the 12MP, which runs from 2021 to 2025, the government has forecast gross domestic product (GDP) to grow between 4.5% and 5.5% annually.
Commenting on the forecast, he said it was a big improvement compared to 11MP, which ran from 2016 to 2020 and registered average growth of 2.7%.
For better economic growth, factors such as technology and the competitiveness of sectors such as electronics and electrical should be considered, he added.
In 12MP, the allocation for development expenditure is the highest in history, with RM400 billion, compared to RM220 billion in 11MP.
“The 12MP has four years left as one year has already passed, to ensure GDP targets are met, good development expenditure is the main prerequisite. It’s a big allocation, but it will have a multiplier effect and a positive impact,” he said.
Associate professor Ahmed Razman Abdul Latiff of Putra Business School (PBS) commented that the average growth target for the services and manufacturing sectors was realistic as the two sectors have been resilient since the pandemic.
However, he noted that the agriculture sector growth estimate was a little low at 3.8% in the five-year period.
“There should be more efforts to enhance the agriculture sector because this year we have a new agrofood policy and productivity should be increased, so that we don’t depend so much on imports,” he said on the same programme.
On the 12MP target to raise household income to RM10,000, Ahmed Razman said the aim was on the high side but it could be achieved.
“The increase from RM7,000 to RM10,000 in five years is quite high, but we must try. It looks high but if we look at the intermediate indicator, it’s only about RM5,800,” he added.