Malaysia Economy will be badly affected if heading for another Lockdown


Malaysia can’t risk another complete lockdown since, according to Finance Minister Tengku Zafrul Tengku Abdul Aziz, it would be “very harmful” to the country’s economy.

In an exclusive interview with CNA, he said the new national Movement Control Order (MCO), which was imposed in all states except Sarawak until Feb 4, rendered it more challenging to achieve this year’s expected growth estimate of between 6.5 percent and 7.5 percent.

He said on Wednesday, “The (growth) projection we made was based on the assumption that there is no MCO” (Jan 27).

I have to say that it is going to be a struggle right now (to meet the forecast). Depending about how long the MCO will be and how long it takes for us to succeed against COVID-19, potentially in the lower half of 6.5 per cent to 7.5 per cent.

The 47-year-old minister added: “I think we can not afford a total lockdown of the economic sectors as a country.” The long-term consequence, the economic scarring, is going to be really devastating.

A more focused strategy is preferred, with the authorities tightening the screw on labor-intensive industries that have led to the uptick in the number of incidents.

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Subject to normal operating procedures, the more automated industries such as pharmacy, aeronautical and automotive sectors should be permitted to function as normal, he added.

Almost all commercial operations halted when Malaysia was first put under the MCO last year, save for critical facilities, such as food and beverage outlets and pharmacies.

In the first half of 2020, the lockdown saw the nation drop its COVID-19 cases to single digits.

This new MCO, called ‘MCO 2.0’ on the other side, has helped more economic industries, such as the car industry and retailers such as jewelry and jewellery shops, to continue to operate.

Despite the new MCO, with Malaysia registering a four-digit increase in regular cases, talk of a return to a strict lockdown has been widespread.

The speculation was sparked by a leaked letter from the EU-Malaysia Chambers of Commerce and Industry (EUROCHAM) to its representatives claiming that, if the amount of COVID-19 cases did not indicate any change, the Perikatan Nasional Government was set to declare a complete economic shutdown after Feb 4.

In a press release last Sunday, EUROCHAM immediately clarified that there was no talk of an immediate lockdown after the specified date during its meeting with the Ministry of International Trade and Industry on January 22.