Late Monday evening, the government announced additional stimulus measures worth RM15 billion under Permai which comprises 22 initiatives in order to combat the pandemic, while also safeguarding the welfare of people and businesses. — Bernama phtoo
KUCHING: Analysts laud the government for rolling out its fifth fiscal stimulus measures on Monday following the re-imposition of the movement control order (MCO 2.0) in several areas following a resurgence in Covid-19 cases.
Late Monday evening, the government announced additional stimulus measures worth RM15 billion under Perlindungan Ekonomi dan Rakyat Malaysia (Permai). The stimulus package comprises 22 initiatives in order to combat the pandemic, while also safeguarding the welfare of people and businesses.
This was on top of the earlier stimulus announced in 2020, such as KITA Prihatin worth RM10 billion, Prihatin Stimulus Package of RM260 billion and Penjana Stimulus Package of RM35 billion.
In total, the stimulus measures introduced to offset the negative impact of the pandemic have now reached a total of RM320 billion or about 20.4 per cent of gross domestic product (GDP).
With the expediting of stimulus as well as the continuation and enhancement of ongoing measures under these packages, Affin Hwang Investment Bank Bhd (AffinHwang Capital) believe these should cushion some of the negative economic effects of the current MCO.
“Government also noted that the current MCO sees more economic activities bein g allowed to operate, and therefore does not have the same drag on the economy as the previous MCO in 2Q20,” it highlighted in its notes yesterday.
“In terms of financing, it was guided that the Permai package will be financed through the reallocation of existing funds based on current priorities and through more
prudent spending.
“The country’s government debt ceiling rate was increased to 60 per cent of GDP recently, starting February 2020 and enforced until December 31, 2022.
“This will enable the government to temporarily increase government fiscal position and partly finance economic stimulus packages to mitigate the impact of the pandemic on the domestic economy.”
Overall, the team of researchers at Hong Leong Investment Bank Bhd (HLIB Research) saw that the Permai stimulus seems to be largely targeted at both the rakyat and SMEs that have been hit by the negative ramifications of Covid-19.
“From a market perspective, our sense is that the stimulus initiatives were largely reiterations of previously announced ones with some having timeline extension or fast tracked and expansion to their allocated sum; as such we expect muted market reaction,” it opined in its own analysis.
“As for its sectorial impact, the extension of the 10 per cent electricity special discount to six industries will help alleviate some burden for aviation and real estate investment trusts having malls and hotels in their portfolios.
“Initiatives related to BPN and wage subsidy 3.0 should help partially cushion the negative hit to the consumer sector during MCO 2.0,” it added.
Also, the acceleration of the Micro SME e-Commerce Campaign and Shop Malaysia Online campaigns should bode well for courier logistics and players that facilitate online transactions.
“For the private healthcare sector, while allowing them to treat Covid-19 patients presents a new revenue stream, this may come at the expense of “non-critical” treatments as people may now view hospitals as a “high risk” area.”