MoF urged to devise economic stimulus package


THE Finance Ministry (MoF) will gather input from various other ministries, industry players and service providers in preparing an economic stimulus package to offset the impact of the 2019 novel coronavirus (2019-nCoV).

Finance Minister Lim Guan Eng said the MoF will discuss with the Economic Affairs Ministry; Tourism, Arts and Culture Ministry; International Trade and Industry Ministry; and also the relevant industry and service companies to get input in planning the economic stimulus package.

“The MoF is very concerned about the 2019-nCoV outbreak that has affected the economy in general and the Malaysian tourism sector in particular. The MoF has been tasked by the Cabinet to devise an economic stimulus package to overcome the economic impact of the coronavirus outbreak, which will be announced at a later date,” Lim said in a statement yesterday.

Last Friday, Bernama reported Lim as saying that the government is evaluating the need for an economic stimulus package and is ready to launch the measures to deal with the effects of the 2019-nCov, if necessary.

“What is important is that we must focus and support the efforts and measures taken by the Ministry of Health to keep the people safe and free from the virus,” he said.

Sunway University Business School economist Prof Dr Yeah Kim Leng (picture) had also told The Malaysian Reserve (TMR) that there is a cogent case for a stimulus package if the coronavirus’ containment efforts by China and countries to which the virus has been transmitted are unsuccessful by the first half of the year (1H20).

The government’s priority for 1H20 should be on speedy, coordinated and efficient spending and project implementation, said Yeah.

“By then, the Chinese economy would be severely impacted by lockdown of cities, restrictions on travel, tourism, entertainment and public events, and emergency measures such as quarantines that would sharply curtail consumer spending and business activities,” he told TMR.

A worst-case scenario could potentially shave off between 0.5% and 1% of China’s economic growth, putting downward pressure on the world economy that’s projected to expand between 0.3% and 0.4% from last year’s estimated 3% growth, he added.

Separately, Opposition MCA deputy president Datuk Dr Mah Hang Soon urged the government to start designing a contingency plan for a “partial or complete collapse of the Chinese economy”.

Dr Mah said Putrajaya shall not adopt a lax attitude toward the outbreak as it may lull many important decision-makers into a false sense of security, while blind public panic is not desired.

“As it is, the effects are being felt already, the most conspicuous hit being the tourism industry,” he said in a statement yesterday.