Govt to unveil economic stimulus next week, eyes post-virus rebound

The stimulus package is neither a new budget nor part of Budget 2020 measures but assistance to the affected sectors

by RAHIMI YUNUS/ pic by RAZAK GHAZALI

PRIME Minister Tun Dr Mahathir Mohamad will announce an economic stimulus package designed to mitigate external economic impacts of the Covid-19 outbreak on Feb 27, 2020.

Finance Minister Lim Guan Eng (picture) said the stimulus is also intended to preserve the welfare of the rakyat.

Lim said the economic stimulus package is neither a new budget nor part of Budget 2020 measures but assistance to the affected sectors to allow the economy to emerge as a whole as much as possible, and strive on from the expected economic post-virus rebound.

“While the market is facing serious challenges, we should not despair but instead persevere to allow our industry to survive so that the country is ready to benefit from the economic rebound once the Covid-19 threat is over,” he said in a statement last Friday.

The minister said cashflow is the principal concern and the affected companies must ensure that they remain viable, and capable of reaping the benefits when the economic rebound takes place.

Lim said the government will adopt measures to assist virus-hit companies, but emphasis should also be placed on exploring alternative revenues such as shifting towards encouraging domestic tourism and sourcing from other markets.

“This also involves keeping the domestic labour market resilient, while ensuring our soft and physical infrastructure remains in place amid the short-term weakened demand,” he added.

He further said the Finance Ministry is preparing the economic stimulus programme and is working together with the Economic Affairs Ministry, Transport Ministry, Tourism, Arts and Culture Ministry, Entrepreneur Development and Cooperatives Ministry and various agencies.

Lim said the government has consulted principal players in the tourism, logistics and finance sectors and held meetings with small and medium enterprises, as well as government-linked funds and companies.

He also called for Malaysians to unite to overcome challenges from the Covid-19 epidemic.

“This is the time for every Malaysian to put our differences aside and come together as one nation and one people. While the government is helping the affected industries, we hope the industry players will play their part in assisting their clients and suppliers so that all can survive this challenge and benefit from the post-Covid-19 rebound,” he said.

The Malaysian Reserve reported a reduction in the Employees Provident Fund contribution rate; incentives and tax rebates for affected sectors; lower borrowing rates; and fast-tracking of key projects could mitigate the economic fallout from the coronavirus outbreak.

Tourism-related and transport sectors are among key areas that are immediately impacted by the coronavirus outbreak, while trade and logistics are expected to take the hit in the medium term.