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Azmin: Economy does not run on ‘off-on’ mode, will take time to recover after MCO

Azmin: Economy does not run on ‘off-on’ mode, will take time to recover after MCO

25 Jan 2021

Malaysia’s economic growth has shown improvement over the past few months thanks to the government’s stimulus packages, but it does not work on an “off-on” switch basis and will therefore need more time to fully recover from the impact of the Movement Control Order (MCO), said Senior Minister Datuk Seri Mohamed Azmin Ali.

He said the government has taken the initiative to pump in a massive RM320 billion worth of stimulus packages not just to mitigate the adverse economic impact on the rakyat but also to jump-start and revitalise the entire economy.

This helped the economy recover from a deep contraction by 17.1% in the second quarter of 2020 to a decline of 2.7% in the third quarter, said the international trade and industry minister.

“While this definitely manifests the effectiveness of the stimulus packages, it should be borne in mind that it would still take at least another quarter, if not more, before the economy could see actual positive growth. This underscores the fact that despite the best efforts at economic recovery, it would take an extended period of time before the economy can actually pick up to show positive growth after the lifting of the MCO.

“Hence, the notion that the economy can revive instantaneously after a lockdown has been lifted has no real basis. The fact of the matter is that the economy does not run on a ‘switch off-switch on’ mode,” Mohamed Azmin said in a statement on his website titled “Going forward in our approach to overcome the impact of the Covid-19 pandemic”.

The minister noted that today marks one year since the first case of the Covid-19 pandemic was detected in the country.

In the face of seemingly insurmountable challenges, he said Malaysia has been able to remain resilient, thanks to our robust public health system and sound economic fundamentals.

Nevertheless, with the onset of the third wave of the outbreak, the country’s healthcare system has been subjected to even greater pressure, testing its capability and capacity to the limit.

In light of the recently reimposed MCO on Jan 13, which has been extended to Feb 4, Mohamed Azmin said it must be viewed along with other suggestions concerning alternative strategies and options.

For instance, he noted the government could consider tightening the standard operating procedures to prevent outbreaks at ignition sites and introducing clear guidance on geospatial planning such as quantifying indoor settings at any given time.

Additionally, the government could also step up targeted testing as well as regulate the costs of RTK-Antigen test kits to make Covid-19 testing more affordable and on a larger scale, particularly for industries, he said.

“It is important to note that apart from the toll on health and the economy, Covid-19 has a direct impact on the people. One loss in income affects the whole household. In practical terms, the loss of income for one breadwinner may well adversely affect the livelihoods of at least four persons in a family,” he said.

Acknowledging the strong support and collaboration by industry stakeholders and the rakyat towards ensuring economic recovery and sustainability during the pandemic, he added: “Public-Private-Rakyat synergy is an invaluable value proposition for nation building and should be embraced by all.”

Source: The Edge Markets

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