Containing Covid-19 transmission crucial for economic recovery
29 Sep 2020
Containing further transmissions of the Covid-19 virus through effective public health interventions is crucial for economic recovery, the World Bank said.
Malaysia country manager Dr Firas Raad said Malaysia has adopted robust and successful containment measures ever since the outbreak of the pandemic, but there has been an uptick in the daily incidence of infections, particularly in Sabah.
“I think government agencies should be concerned and pay attention to this subject and undertake effective containment so that it does not spread to other parts of Malaysia,” he told reporters after the launch of the World Bank’s October 2020 Economic Update for East Asia and the Pacific titled “From Containment to Recovery” here today.
On whether Malaysia could afford another partial lockdown to contain Covid-19, World Bank Group lead economist Dr Richard Record said while the movement control order had managed to mitigate and cushion some of the impacts from the health crisis, it would be tough to go through all of it again.
“Malaysian institutions here, like in many other countries around the world, have learned a lot from the last six month and have a much of a better sense of health to manage tracking and tracing, while the society also has the understanding on how to prevent the spread of the disease,” he said.
Meanwhile, Firas said Malaysia’s economic recovery is projected to pick up in 2021, with an estimated economic growth rate of 6.3 per cent, given a number of assumptions regarding Covid-19 containment measures and the resumption of global economic activity.
He said this estimation naturally has a large degree of uncertainty surrounding it, given the unpredictability of the longevity and severity of the pandemic.
“If you let your guard down and people do not comply with public health guidelines and the standard operating procedures, then there would be a resurgence of infections, and we have seen this in the European countries, Japan and Australia,” he said.
Meanwhile, Firas said despite the recent increase in public sector borrowing to fight Covid-19, the government’s overall debt remained manageable as it is predominantly denominated in local currency and has medium to longer-term maturities.
“Private debt, however, whether household or corporate, is relatively elevated and continues to pose risks to the financial system.
“However, these risks are partly mitigated by high household financial assets and still sound banking sector profitability and profitability,” he added.