Malaysia's phased reopening on right track: Citi

THE Malaysian government's aim to accelerate vaccination rates to 200,000 doses per day by July and 300,000 doses per day from August is achievable and a move to Phase 2 by early July may be within sight, said Citi analysts in a report on Tuesday.

This takes in the fact that notwithstanding daily fluctuations, vaccination rate rose to 197,000 per day on June 14 versus 140,000 per day just the week before. It also assumes that deliveries of Pfizer (25.9 million in Q3) and Sinovac vaccines (about 5.6 million based on Citi estimates) are on time, translating to 324,000 doses per day. If deliveries of Thai-made AstraZeneca vaccines (1.6 million in Q3) are also factored in, this rises closer to 360,000 doses per day.

"Simplistically assuming that 200,000 doses are administered per day through July, with half administered to those on their second dose, implies 10 per cent of the population fully vaccinated by end-June/early July," said the analysts.

Malaysian Prime Minister Muhyiddin Yassin on Tuesday unveiled a four-phase post-pandemic exit plan for Malaysia. Dubbed the National Recovery Plan, Mr Muhyiddin described the current lockdown as the first phase of the exit plan.

The second phase will kick in once Malaysia's daily new infections fall below 4,000 cases, and also after 10 per cent of the population has been fully inoculated. This is expected to take place in July and August.

The third phase, aimed at the beginning of September, will see most sectors of the economy allowed to open by default, while some curbs on social sectors remain. For this, daily cases have to dip below 2,000 a day and 40 per cent of the population has to be fully vaccinated.

A full reopening is projected from November onwards, once 60 per cent of the population has been fully vaccinated and daily cases dip below 500 a day.

Malaysia is undergoing its third nationwide lockdown to tame the latest Covid-19 surge.

Citi added that it maintains the view that 2021 GDP (gross domestic product) will likely be closer to 5.5 per cent and that it still sees a 30-40 per cent risk of an overnight policy rate (OPR) cut in July.

Whether the hurdle for another cut will be crossed will depend on expectations of the growth trajectory closer to the meeting which will hinge on the pace of reopening, duration and lagged impact of the total movement control order on jobs, and whether new and earlier measures are viewed as plausible substitutes for an OPR cut.