Tuesday, November 30

New Covid-19 variants could dampen job market prospects ­

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Analysts are still cautious on Malaysia’s job market prospects as uncertainties surrounding new Covid-19 virus variants and business prospects could put a lid on job prospects. — Bernama photo

KUCHING: Uncertainties surrounding new Covid-19 virus variants and business prospects could put a lid on job prospects, analysts opine.

AmBank Research gathered that the unemployment rate peaked after improving from the 4.8 per cent level for two consecutive months in June and July.

“This is possibly due to the easing of restrictions and gradual reopening of the economy coupled with the high vaccination rate that allowed more sectors to operate,” the research firm said yesterday.

AmBank Research expected Malaysia’s full-year unemployment rate to settle at 4.4 per cent from 4.8 per cent previously as the economic reopens with the labour market continuing to recover, albeit at a moderate pace.

Now with 90 per cent of the adult population vaccinated, the research firm also expected the economy to move into the endemic Covid-19 phase by end-October.

“This will allow more sectors to be reopened with new Covid-19 norms being practised, reinforcing growth and labour market prospects.

“Still, we need to remain cautious. Uncertainties surrounding new Covid-19 virus variants and business prospects could put a lid on job prospects.

“There is a need to look at the underemployed segment and those in the informal sector.”

AmBank Research added that it will take a few years, likely around 2023 for the country to reach an unemployment rate around the 3.3 per cent pre-pandemic level.

The research arm of Kenanga Investment Bank Bhd (Kenanga Research) also noted that downside risks remain associated with the unabated surged of Covid-19 infections brought by the emergence of the new variant, which could threaten the pace of economic recovery.

That said, Kenanga Research expected the labour market to gradually recover towards the end of the year in line with the expected resumption of most economic activities as the country shifts to the endemic phase amid the progress of the Covid-19 vaccination rate.