The govt spent the whole of last week engaging with micro businesses and SMEs to deliberate a special SME stimulus package

by DASHVEENJIT KAUR/ pic by TMR FILE

FINANCE Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz revealed that Prime Minister Tan Sri Muhyiddin Yassin will be announcing the support measures for the small and medium enterprises (SMEs) this week.

Tengku Zafrul said the government has spent the whole of last week engaging with micro businesses and SMEs to deliberate a special stimulus package for SMEs.

“This entire week has seen close engagements between the government and members of the business community, particularly concerning micro businesses and SMEs.

“We have collated and considered all feedback, and certain areas have been identified for fine-tuning and improvements,” he said in a statement on Saturday.

Tengku Zafrul said initiatives under the RM250 billion Prihatin Nasional economic stimulus package were rolled out within days of its announcement last week.

Formulated to address the adverse impact of the Covid-19 on the country, he said Prihatin Nasional is driven by three objectives — to protect the people, support businesses and strengthen the economy.

He also noted that the stimulus package will contribute an estimated 2.8% to GDP this year.

Last Friday, Bank Negara Malaysia (BNM) announced that the country’s economy may shrink to a low of -2% this year.

The central bank forecast, in the best-case scenario, that the economy could avoid a recession with a growth of 0.5% in 2020 due to the pandemic.

“Malaysia’s challenging growth outlook, however, is not unexpected given the current global economic slowdown brought about by the Covid-19 pandemic.

“Lockdowns to contain the pandemic across countries worldwide have disrupted both supply and demand chains, and we are not spared from the global situation. Domestic conditions continue to be challenging as the threat of Covid-19 has impacted all facets of the nation,” Tengku Zafrul said.

He emphasised that the recovery period depends on how well and quickly the country can overcome the threat of Covid-19.

“The current outlook forecasts the nation’s economy to rebound in 2021 with some recovery expected towards the second half of 2020.

“Yet, downside risks remain as the Covid-19 situation is unprecedented and we need to expect the unexpected,” he added.

Nevertheless, Tengku Zafrul said the government has the capacity and fiscal space to meet future uncertainties, and it is fully aware of the need to be agile and to respond swiftly.

To steer through these challenging times, he noted that BNM will ensure that the financial system remains stable with deep liquidity and strong buffers.

“As it stands, the financial system today has RM121 billion in excess capital buffer, compared to only RM39 billion during the global financial crisis of 2008,” he said.

On the capital market side, Tengku Zafrul said the Securities Commission Malaysia and Bursa Malaysia will continue to ensure that markets stay open, transparent and orderly.