Pent-up demand from the reopening of the economy and the new normal will be the driver of the economy

by FAYYADH JAAFAR / pic by MUHD AMIN NAHARUL

THE current economic crisis will not last forever and the economy will recover next year.

Malaysian Industrial Development Finance Bhd (MIDF) head of research Imran Yassin said pent-up demand from the reopening of the economy and the new normal will be the driver of the economy.

In the “Taking Steps Towards Recovery” discussion at Minggu Saham Digital recently, Imran expected that the reopening of the economy will also create more job openings while the new normal will create jobs with new skill sets.

However, he added that although Malaysia’s economy is recovering, the government must be careful with the inflation rate happening in the US.

“If the inflation goes on for a long period, the US Federal Reserve will have to increase interest rates and we will follow suit.

“Then our financing costs will be much higher,” he said.

He also warned that the property sector in China is another thing to be concerned about.

“Moreover, any resurgence of Covid-19 cases that could happen anytime might also lead the country to another prolonged lockdown. If that happens, we will be back in the same situation again,” Imran said.

Meanwhile, MIDF head of development (finance) Azizi Mustafafor opined that this is an opportune time for companies, and small and medium enterprises to reflect and plan for their future.

“It is important for them to look at their own situations and see where they can make improvements.

“Companies must adapt and think forward, and try to capitalise on the opportunities presented in the new normal to change their strategies in regards to marketing, sales and products so that they can face any challenges in the future,” he said during the discussion.

He advised companies to identify the strengths and weaknesses of their business model, and use this information to formulate a resilient strategy for the future.

On digitalisation, Azizi said the current economic crisis has made it imperative for companies to be digitally agile, but that the biggest challenge for many companies was the lack of proper planning.

“We have to make proper short-, medium- and long-term plans, so that what we do today can remain resilient. Or else, it will be a waste of resources and capital,” he added.

Regarding new investors, MIDF head of digitalisation Khairi Shahrin Arief Baki said they should start small and grow slowly.

“The first step is to learn the basics of investing as it is very easy to get carried away by the excitement and the hype. New investors must be careful not to lose sight and be realistic,” he advised.

He said resources available online can help new investors understand the basic concepts of investment.

“YouTube, podcasts, webinars and other online resources are great ways to learn about it.

“But at the end of the day, planning is essential; you must know your goals and objectives before you begin,” he concluded.