Malaysia announces National Recovery Plan – UOB

UOB Group’s Senior Economist Julia Goh and Economist Loke Siew Ting comment on the recent announcement by the Malaysian government.

Key Quotes

“PM Tan Sri Muhyiddin announced a National Recovery Plan yesterday (15 Jun), which is a fourphase exit strategy from the COVID-19 pandemic. The recovery plan outlines three targeted indicators (average daily new infections, capacity of healthcare system/ICU bed utilisation, and % of population that received two doses of vaccines) under each phase before further reopening of economic and social sectors are allowed.”

“Based on the plan, the government targets to allow all economic sectors to reopen at 80% operating capacity by phase 3 (in Sep-Oct), and a full reopening by phase 4 (in Nov-Dec). However, this is subject to reaching the targets outlined. Sports, social activities, and education sector will also be allowed to resume in stages under phase 3. Parliament sessions will commence around Sep/Oct in accordance to strict SOPs. Domestic tourism activities and interstate travel are targeted to be permitted in phase 4.”

“The National Recovery Plan aims to provide some guidance for the people and businesses on the path forward over the coming months since the nationwide lockdown started on 1 Jun and was extended until 28 Jun. The estimated period under the planned phases is in line with our assumptions when we revised down our full-year GDP projection to 4% for 2021 (from 5% previously). The government recently announced additional support of MYR40bn or ~2.6% of GDP. We expect the Overnight Policy Rate (OPR) to remain unchanged at 1.75% until year-end.”