Malaysia unveils RM20b package to jumpstart economy

Kuala Lumpur

MALAYSIA announced a RM20 billion (S$6.5 billion) package to revitalise economic activity as Covid infections slow and vaccines are rolled out.

The plan will include a RM11 billion fiscal injection, Prime Minister Muhyiddin Yassin said in a televised address on Wednesday. There will also be no more blanket lockdowns, he announced, adding that any movement control orders will be done at localities and clusters.

The decision comes a day before the one-year anniversary of the virus lockdown aimed at curbing the spread of the pandemic. The number of new daily cases has been falling since January's peak, sparking optimism the economy will improve in coming months. Tuesday's tally was the smallest since early December.

The ringgit held earlier losses, trading 0.2 per cent weaker at 4.1213 per dollar.

Mr Muhyiddin in January announced RM15 billion of additional stimulus to support the economy after the country declared a state of emergency to help curb the spread of coronavirus. In November, the government unveiled a record RM322.5 billion Budget for 2021 to spur activity and support growth.

Malaysia's economy is expected to grow by 6.7 per cent this year, and by 4.8 per cent in 2022, recovering from a 5.6 per cent contraction last year, Economy Minister Mustapa Mohamed said on Tuesday, citing data from the World Bank.

Other measures announced today include:

• Discount on electricity bills extended to June 30;
• Tax breaks on tourism extended till Dec 31;
• One-time payout of RM500 to the poorest 40 per cent, known as the B40;
• Equity crowdfunding expanded to unlisted companies; and
• A RM20 million grant for palm-oil machinery

As part of the package, the government will spend RM3 billion to RM5 billion to accelerate the immunisation target to December, from the initial target of the first quarter of 2022, said Mr Muhyiddin, who took the second dose of the Covid vaccine on Wednesday. BLOOMBERG