Malaysia Recovery Seen Driven by Tech Upcycle, Vaccines
Malaysia is in the ‘fifth stage” of an economic recovery with the technology upcycle, Covid vaccinations and an improving jobs market helping drive growth, according to Finance Minister Tengku Zafrul Abdul Aziz.
The economy will grow at 6% to 7.5% in 2021, he said at a briefing Monday, matching the central bank’s projections made last month. A global recovery will help bolster growth, as well as projects like the mass rapid transit and the Pan Borneo highway at home, he added.
“Vaccination is the exit strategy for this economic recovery. We must win the war against Covid-19,” he said. “This is important to achieve the herd immunity.”
Malaysia started its Covid-19 vaccination program late February and unveiled a 20 billion ringgit ($4.9 billion) stimulus package in March while easing movement curbs to help stimulate growth. The central bank said last month it expects the economy to return to pre-Covid levels by the middle of this year, and pledged to keep monetary policy accommodative.
Zafrul said the government is still committed to fiscal consolidation. He expects the fiscal deficit to widen to 6% this year, up from an initial projection of 5.4%, following the stimulus program and an increased allocation for Covid vaccines. Fiscal deficit stood at 6.2% in 2020.
The federal government’s debt and liabilities amounted to 89.2% of gross domestic product, he added.
Below are more points Zafrul made.
- Government tapped into the national trust fund to help fund its vaccine purchases. The fund totaled 19.5 billion ringgit, of which national oil company Petronas contributed 10.4 billion ringgit
- Government has raised vaccine allocation to 3.5 billion ringgit from 2.3 billion ringgit, and expects to spend 1.5 billion ringgit on the immunization program -- more than double the initial forecast
- NOTE: A total of 498,504 individuals have received both doses of their vaccine shots as of April 24, according to the health ministry; that’s in line with first phase target involving 500,000 frontliners and health workers
- The second phase, involving 9.4 million people aged 60 and above, began this month and will run through August
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