Economic Performance And Challenges
The year 2020 is a tumultuous period for Malaysia, marked by many
challenging circumstances. Never
before in modern history has an epidemic wrought such profound changes.
The spread of COVID-19 has not only taken people’s lives but stifled economies.
There are no guidelines nor precedence that can be used as reference because
this is an unprecedented crisis.
The crisis has shocked supply and demand, disrupted supply chains,
and exerted great pressure on the business ecosystem. We also have to deal with
uncertain external headwinds, falling commodity prices and limited fiscal
The International Monetary Fund or IMF has
projected the global economy to contract by 4.4 percent this year.
Global trade, meanwhile, is set to decline by 10.4 percent. Described as the
worst economic crisis since the 1930s’ Great
Depression, the COVID-19 pandemic has upended the economies in over 150
From the start, the Government has made it its utmost priority to
protect the Rakyat’s lives above
all else. That
is why the Government has implemented the Movement Control Order (MCO) even though we know that
the action, over
the course of nearly 2 months, will impact the Rakyat’s economic and social activities. At that time, Bank Negara Malaysia (BNM)
estimated that the country will lose between 2.0 to 2.4 billion ringgit daily
with the closure of the economy.
In balancing our responsibility to protect the lives and
livelihood of the Rakyat, the Government has to act quickly. As such, a phased
economic recovery plan was introduced, centred on the 6R approach of Resolve,
Resilience, Restart, Recovery, Revitalize and Reform.
At the initial Resolve stage, the Government’s priority was to
flatten the curve of COVID-19. Meanwhile, during the second stage of
Resilience, the PRIHATIN and PRIHATIN SME PLUS packages worth 260 billion ringgit
were introduced to
mitigate the impact of the economic shutdown. We entered the
Restart phase in May 2020, when economic activities gradually reopened
after we had successfully flattened the curve. Subsequently, the country
shifted to the Recovery phase, when the Government activated the 35
billion-ringgit PENJANA package and 10 billion ringgit KITA PRIHATIN package.
The total value of the stimulus packages announced by the Government is 305
billion ringgit or 20.7 percent of
the country’s Gross Domestic Product (GDP).
The LAKSANA unit was established to ensure that these stimulus
packages are implemented efficiently, with transparency, and driven by
data. Based on
a survey done by LAKSANA on the effectiveness of
PRIHATIN, more than 80 percent of the 11 thousand
respondents indicated that they were satisfied with the
initiatives. I would like to thank LAKSANA and the more than 53 government
agencies who have closely collaborated and shared data to ensure the successful
implementation of these stimulus packages.
All these implemented initiatives are counter- cyclical measures,
aimed to mitigate the impact of COVID-19. Alhamdulillah, we are seeing the
country’s GDP showing
signs of recovery from negative 28.6 percent in April 2020 to negative 3.2
percent in June. Early GDP estimates for July to September also indicate an
encouraging growth trend.
In relation to this, taking into consideration the current
environment, the country’s economic growth was revised for the year 2020 and is
expected to contract 4.5 percent. For 2021, our economy is expected to recover
and expand at a rate between 6.5 to 7.5 percent. This is in line with the
proactive measures undertaken by the Government through the economic stimulus
packages, the Budget 2021 initiatives and supported by the recovery of the
global economy, which is forecasted to rebound
by 5.2 percent.
One irrefutable fact that is worth reminding is, irrespective of
the challenges, we have proved to the world that Malaysia can steer our own
economy, whether in stormy seas or calm waters. Let us turn our experience in
facing past economic crises into an anchor that keeps us committed, so
that we remain steadfast in our
endeavours, reasoned in our actions, and surefooted in mustering our collective
I am deeply touched by the #KitaJagaKita spirit among the
Malaysians, I recall Encik Rosnizam Ishak, hailing from Bertam, who started
marinated lamb business using the Bantuan Prihatin Nasional assistance and
created job opportunities for locals. There is also Mr. Pajan Singh s/o Kirpal
Singh, who provided free accommodation for frontliners serving in Kuantan
during the period of MCO till the CMCO, and Mrs. Michelle Kugan, an
entrepreneur who sells crystal and pearl fashion accessories, benefitted from
the microcredit loan under TEKUN to
sustain her business in Tuaran, Sabah. It is in this spirit and undertaking, that Budget 2021 has been formulated for
Malaysians with the theme “Stand United, We Shall Prevail”.