Malaysia: The government stepped in with extra aid – UOB

UOB Group’s Senior Economist Julia Goh and Economist Loke Siew Ting review the recent announcement of the Malaysian government.

Key Quotes

“As the nationwide lockdown is extended further, Malaysia’s government announced further aid under the PEMULIH package worth MYR150bn. This brings cumulative assistance since 2020 to MYR530bn that was announced over eight fiscal packages (including MYR40bn announced in late May). The direct fiscal injection from PEMULIH is MYR10bn which covers mainly cash aid, wage subsidies, grants, healthcare and vaccination spending.”

“PEMULIH covers three focus areas – 1) support for people’s welfare, 2) helping businesses, and 3) accelerating vaccination.”

“The sizeable amount of spending will help to cushion somewhat the effects of the ongoing lockdown with measures taking effect from July until Dec, which coincides with the four phases of the National Recovery Plan (the country’s pandemic exit strategy) over the next six months. However, given the fluid condition and pandemic uncertainties, downside risks prevail especially if there are delays in the vaccination roll-out and threat from new COVID-19 variants. We maintain our full-year GDP estimate of 4.0% for 2021. With the additional support, we expect Bank Negara Malaysia to keep the policy rate unchanged at 1.75% on 8 July.”