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Malaysia announces RM35b in additional stimulus

[KUALA LUMPUR] Malaysia unveiled RM35 billion (S$11.46 billion) in additional stimulus to help the economy recover from the coronavirus pandemic.

The new plan, which follows a late-March stimulus package worth nearly US$60 billion, includes RM10 billion in direct fiscal injection to the economy, Prime Minister Muhyiddin Yassin said in a speech Friday.

The benchmark FTSE Bursa Malaysia KLCI index pared its decline to 0.2 per cent as of 3.35pm in Kuala Lumpur.

The announcement comes as countries across South-east Asia and around the world struggle back to their feet after lockdowns and restrictions brought commerce to a halt. Governments across the region have rolled out economic support to shield consumers and businesses from the worst of the blow, while central banks including Malaysia's have lowered interest rates and taken steps to keep liquidity flowing.

Malaysia's economy expanded 0.7 per cent on-year in the first quarter, its worst showing since the global financial crisis, as restrictions imposed to curb the virus choked commerce. The economy began reopening May 4 but is set to slip into recession over the next four to six months as the full impact of the pandemic is felt, Malaysia's top statistician said last week.

The plan includes:

- RM5 billion for wage subsidies

- RM2 billion for upskilling programs for unemployed and youth

- RM1 billion for small and medium-sized enterprises in the tourism sector

- tax breaks for some corporate spending

- a policy will be drafted for the gig economy and its workers

- establishment of a national jobs task force

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