WITH the spectre of tougher restrictions looming due to the recent spike in detected Covid-19 cases, real concerns arise on how much renewed strain our economy can withstand.
If we take into account the World Bank’s prediction of Malaysia’s economic growth forecast this year contracting to 4.9%, the answer is quite sobering.
Our economic recovery has been heavily dependent on domestic consumption. Given the sharp rise in unemployment in the second quarter of this year, we have a seen a “bloodbath” in the retail market with sales plummeting to 30.9% during this period.
World Bank Group lead economist Richard Record pulled his punches when he said it would be challenging for the Malaysian economy to endure another round of stringent movement control order (MCO).
As it is now, Malaysia’s debt is about 60% of gross domestic product (GDP) and the country’s fiscal deficit is set to rise to 6% from 3.4% in 2019 with the National Economic Recovery Plan (Penjana) in place.
These situations are mirrored in most countries. Global debt levels are at record highs and growing financial bubbles being fuelled by the fiscal and monetary stimulus measures introduced to counter the economic damage caused by the pandemic.
The fight against the virus is on two fronts - the people’s health and the country’s economic well-being.
The fronts are interlinked as the economic situation of the country is dependent on the welfare of the people.
While the aid packages introduced by the government have done well to sustain businesses and individuals so far, it can ill-afford to roll out more spending measures as the national debt is considerable, and budget deficit is bursting at its optimal seams.
Focus has to be on containing local transmissions of the virus which have spiked of late.
As pointed out by the Malaysian Medical Association, the next two to three weeks will be important in controlling the spread of Covid-19 infections as a large number of travellers from Sabah will be returning to other states after the state election on Sept 26.
Although it is not compulsory for those returning from Sabah to undergo the 14-day quarantine if they have tested negative for the virus, they should heed Health director-general Tan Sri Dr Noor Hisham Abdullah’s call for self-discipline.
He also advised the returnees to go to the district health centres or health clinics to undergo swab tests on the 13th day to make sure they are truly free from the virus.
If these calls go unheeded and the number of local transmissions continues to rise, quarantine would have to be mandatory. We just cannot afford another round of stringent MCO.
