Malaysia rolls out RM35b in additional stimulus

Kuala Lumpur

MALAYSIA has unveiled RM35 billion (S$11.4 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 RM250 billion, includes RM10 billion in direct fiscal injection to the economy, Prime Minister Muhyiddin Yassin said in a speech on Friday.

"Compared to the cumulative RM260 billion stimulus that the authorities announced before, today's RM35 billion additional package would feel relatively less noteworthy," said Wellian Wiranto, an economist at OCBC in Singapore.

Still, at a combined 20 per cent of gross domestic product (GDP), the packages "should help to put a floor on where growth might dip to this year", he said.

Malaysia's economy expanded 0.7 per cent year 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 re-opening on 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.

In the latest stimulus package is RM5 billion for wage subsidies, RM2 billion for upskilling programmes for unemployed and youth, RM1 billion for small and medium-sized tourism enterprises, and stamp duty exemption for first-home purchases. BLOOMBERG