Bank Islam chief economist Dr Mohd Afzanizam Abdul Rashid said the RM250 billion allocation, which includes the amount allocated for measures announced earlier, brings the size of the government’s fiscal stimulus to 17 per cent of Malaysia’s gross domestic product (GDP).
“This is huge compared to 10 per cent for the 2009 stimulus package. We could see cash transfers to be paid to the bottom 40 per cent household income (B40) and middle 40 per cent household income (M40) communities, wage subsidies and measures to support businesses,” he said.
He said Bank Islam could also see participation by other government agencies in contributing to the stimulus package, including Bank Negara Malaysia, the Employees Provident Fund (EPF) and government-linked companies.
“In a nutshell, it’s huge and comprehensive,” he said.
Universiti Malaysia Sarawak (UNIMAS) dean of the economic and business faculty, Prof Dr Shazali Abu Mansor, concurred that the PRIHATIN package presented is very comprehensive and covers many objectives.
He noted that one of the objectives is to spur economic growth.
“The stimulus package will add 2-3 per cent to the GDP growth,” he told Bernama in an interview today.
Shazali said at RM250 billion, the total PRIHATIN allocation is almost equivalent to the 2020 Budget’s expenditure allocation of RM297 billion.
”Compared to the US stimulus package of US$2 trillion, which is 10 per cent of its US$20 trillion GDP, our package is much more realistic in this situation because this is the time when we shouldn’t think too much on whether we have a deficit budget or otherwise; and I’m sure we have enough internal sources of fund to implement this package,” he said.
The economist said the package also zooms to the objective of helping people in need, and this in turn will spur the country’s growth.
“This stimulus package would definitely cheer Malaysians up, because it is comprehensive. It doesn’t matter who you are, you are being covered by the package,” he said, adding that even some of them would get more than their usual working income, particularly for an ordinary worker.
“Hopefully with this stimulus package, the circulation of funds will be in the country and it will spur the economy, as when the rakyat have the money, they can use it for food and medical needs,” said Shazali.
He said this stimulus package is very interesting and comprehensive and would have an immediate effect through handouts, particularly to frontliners, pensioners and civil servants, in addition to benefiting employers that may have considered retrenching workers.
He noted that the stimulus package would spur the economy and generate disposable income for the people, as this would increase their domestic consumption rather than external consumption.
Shazali opined that through the RM250 billion stimulus package, the government would not run out of funds, as institutions prefer to buy Malaysian Government Securities (MGS) as compared to investments in the stock market.
“MGS would guarantee a better return compared to the stock market and other markets. I don’t think the government would resort to international borrowings as the domestic institutions have stable income for future dividends.
“At this juncture, you don’t care too much on having a deficit but focus on how we can protect the people, and I think it is the job of the government,” he said.
Meanwhile, Bank Islam’s Mohd Afzanizam said it is imperative to ensure everyone adheres to the movement control order (MCO) in order to break the infection chain of COVID-19.
“The sooner the MCO will be lifted, the better it will be for our economy,” he said, adding that it will however be contingent on the success in combating and suppressing the COVID-19 outbreak.