KUALA LUMPUR – Malaysia is maintaining its Gross Domestic Product (GDP) growth target of between 6.5% and 7.5% for 2021 despite the emergency declaration and the second round of the Movement Control Order (MCO 2.0) enforcement, said Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz, reported Bernama.
“It is still early and we are still in the first quarter of the year. So we are maintaining it (for now) but our forecast is at risk given (what is happening) during the MCO 2.0. It (the GDP) will be at the lower end of our forecast,” he said during an interview with Bloomberg on January 22.
Moreover, Tengku Zafrul added the stability and persistency of policies were crucial in controlling COVID-19 and enabling the country to be on this economic recovery path.
The government is committed to supporting businesses and the people, and ready to deploy more resources to combat the deadly virus if needed, he said.
“The impact (of losses on the economy) per day during the previous MCO was around RM2.4 billion, but this time around (MCO 2.0), it is about RM700 million per day.
“Additionally, we have also started to implement various stimulus packages that are still ongoing, and the recently approved Budget 2021 and the recent assistance package (Economic and Rakyat Protection Assistance Package or PERMAI) will help to mitigate the impact on the economy,” the minister said.
Furthermore, when asked whether there would be moves to expand the debt ceiling potentially, Tengku Zafrul said the government has no plan to increase it currently as the situation is too early to make any revision.
“If we look at where the debt level is today, we will continue to forecast that our debt level will be below the 60% debt ceiling we set earlier on. In terms of our stimulus package PERMAI that we announced for this year, the fiscal injection is about RM15 billion, where most of the money will be coming from the allocation under Budget 2021,” he explained.
Besides that, updating the progress on the 1Malaysia Development Bhd (1MDB) scandal, Tengku Zafrul said Malaysia had recovered around RM15.4 billion in cash and physical assets associated with the strategic development company.
He added Malaysia is committed to securing the remaining assets above and beyond what it has achieved today regardless of the COVID-19 situation.
“The Malaysian government remains committed to undertaking a responsible and pragmatic approach in the repatriation process that benefits the country and the people,” he said, citing 1MDB debt servicing is already part of the government’s projection under Budget 2021.
Commenting on Joe Biden’s presidential inauguration, Tengku Zafrul expressed hope that the United States and China’s trade tensions would be diffused under the new administration.
“We hope that global trade can function in a more orderly manner under the ambit of the World Trade Organization,” he added.
The US is Malaysia’s third-largest trading partner, accounting for 10% of the total trade in the first three quarters of last year.
Read more: Cultivating Financial Literacy Awareness with the uLearnMONEY Financial Literacy Video Contest
Discussion about this post