KUALA LUMPUR, March 1– The government expects Malaysia’s economic position to improve this year, in line with the recovery in global economic and trade activities, Prime Minister Tan Sri Muhyiddin Yassin said.
Citing a World Economic Outlook report, he said the world’s gross domestic product (GDP) in 2021 was projected to recover at 5.5 per cent, while world trade was also projected to grow at 8.1 per cent.
“International bodies such as the International Monetary Fund and World Bank in January 2021 projected that our country’s economy will grow at a rate of 7.0 per cent and 6.7 per cent, respectively,” he said in his One-Year Malaysia Prihatin Keynote Address on Monday.
Muhyiddin said the country’s economic recovery will also be led by the services and manufacturing sectors which contribute more than 80 per cent of the GDP.
“At the same time, domestic demand is projected to record a steady growth, supported by improvements in the labour market, low inflation and favourable financing conditions, as well as the resumption of major infrastructure projects,” he said.
As such, Muhyiddin said the Perikatan Nasional government is determined to drive the economic recovery more vigorously this year for the well-being of the people after overcoming all challenges in 2020.
“I know, even though the situation has gradually improved, many people out there are still losing their source of income and many entrepreneurs are facing pressure to continue their business,” he said.
During the second Movement Control Order (MCO) period, he said the government had sought to balance between public health interest and economic growth needs.
Therefore, he said the government decided to provide flexibility by reopening more economic activities compared to under first MCO provided they adhere to strict standard operating procedures (SOPs).
“The SOPs for all economic activities have also been tightened with the active involvement of associations and chambers of commerce,” the prime minister said.
He said permission for more economic activities to operate was very important because as a trading country, goods and products produced in the country needed to be exported.
“We know, for example, rubber gloves, electrical and electronic products, and wood products such as furniture are in high demand in the export market,” he said.
Besides that, he said the survival of economic sectors such as manufacturing, services and retail is also very important because it also helps the operations of small and medium enterprises in the value chain of national economic activities.
He said the impact of the implementation of the second MCO in early stages was three times lower with only manufacturing and part of the retail and construction industries allowed to operate with a 100 per cent production capacity, compared to the first MCO.
However, Muhyiddin said the loss of revenue was still large at around RM633 million a day.
Hence, he said the government had directed for all economic activities in the services, retail and construction sectors be allowed to operate at a 100 per cent capacity with strict SOPs to be complied with.
“Permission to operate for these economic activities provides an opportunity for companies to continue to generate income,” he added.