Senior Economist Julia Goh and Economist Loke Siew Ting at UOB Group assessed the recent measures announced by the Bank Negara Malaysia (BNM).
Key Quotes
“A supplementary package worth MYR10bn was announced yesterday (6 Apr) to address some of the concerns raised by the small- and medium-sized enterprises (SMEs) as the effects of COVID-19 and the Movement Control Order (MCO) raise risks of business closures and job losses. The measures aim to provide financial relief for SMEs, to support businesses, and retain jobs during and post MCO.”
“The additional support includes a top-up of MYR7.9bn to MYR13.8bn for the SME wage subsidy scheme and special grants worth MYR2.1bn to benefit 700,000 eligible micro SMEs. The expanded wage subsidy scheme requires the SMEs to retain employees for six months and estimated to benefit 4.8 million workers. Other benefits include tax breaks for private landlords who offer at least 30% discounted rentals to small businesses for the period of Apr-Jun 2020, as well as a 25% reduction in foreign worker levies.”
“The additional spending brings the total stimulus package to MYR260bn (or 18% of GDP) to help mitigate the severe impact of COVID-19 and avert a sharper contraction in economic activity in 2020. Prior to this additional stimulus package for SMEs, Bank Negara Malaysia (BNM) estimated the stimulus measures under the Package 1 & 2 would add 2.8% pts to GDP. With the additional spending, the government’s direct fiscal injection will rise to MYR35bn, which would be funded through government funds and domestic borrowings. This will also raise the fiscal deficit target to 4.7% of GDP in 2020 (from 4.0% previously).”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD holds above 1.0700 ahead of US jobs report
EUR/USD stays in a consolidation phase above 1.0700 after closing the previous two days in positive territory. Investors eagerly await April jobs report from the US, which will include Nonfarm Payrolls and Unemployment Rate readings.
GBP/USD advances to 1.2550, all eyes on US NFP data
The GBP/USD pair trades on a stronger note around 1.2550 amid the softer US Dollar on Friday. Market participants refrain from taking large positions as focus shifts to April Nonfarm Payrolls and ISM Services PMI data from the US.
Gold remains stuck near $2,300 ahead of US NFP
Gold price struggles to gain any meaningful traction and trades in a tight channel near $2,300. The Fed’s less hawkish outlook drags the USD to a multi-week low and lends support to XAU/USD ahead of the key US NFP data.
Solana price pumps 7% as SOL-based POPCAT hits new ATH
Solana price is the biggest gainer among the crypto top 10, with nearly 10% in gains. The surge is ascribed to the growing popularity of projects launched atop the SOL blockchain, which have overtime posted remarkable success.
US NFP Forecast: Nonfarm Payrolls gains expected to cool in April
The NFP report is expected to show that the US economy added 243,000 jobs last month, sharply lower than the 303,000 job creation seen in March. The Unemployment Rate is set to stay unchanged at 3.8% in the same period.