As the world continues to be surrounded by the news of Covid-19 (Coronavirus) epidemic, investors are getting increasingly concerned over the rising cases of deaths worldwide due to Covid-19. The governments are now shifting their attention to the recovery from the virus outbreak that has halted businesses.
To contain the impact on economy and markets, Governments around the region are wheeling out stimulus packages to reinforce the affected industries and Malaysia is expected to do so soon. Businesses are getting hampered in Malaysia as their supply chain is closely linked to China. With businesses in China running off-mark and workers delaying their return to work after the Festival break, the situation is resulting in below-optimum manufacturing levels.
The Government is set to announce a stimulus package on 27th February 2020 to outweigh the damage to the economy appearing from the Covid-19 outbreak. To recap, the stimulus package for SARS was provided two months after the first reported case in Malaysia, as compared to one month for the Covid-19 epidemic. Malaysia’s SARS stimulus package was around 2% of GDP and comprised of 90 measures devised to provide prompt relief to affected sectors.
Under the stimulus package, the government is expected to spend up to RM15 billion to stimulate Malaysia’s economy and balance out any adverse effect from the outbreak and other external uncertainties.
Some other measures planned by the government include:
• Special relief guarantee facility
• Reduction of employees’ EPF contribution
• Rental rates reduction at Malaysia Airport
• One-off reduction in road tax for taxis
• Stabilization and support package for workers and enterprises
• Care and support package for households
• Fund for front-line agencies fighting the outbreak
• Wage cost incentives
• Corporate income tax rebates
• One-off cash payout ranging from MYR 300-800 for citizens aged 21
• Property tax rebates
• Rental waivers for sectors directly hit by the outbreak (i.e. tourism, aviation, retail, food services, point-to-point transport services).
These measures are expected to balance the economy and help in eliminating any chance of any adverse effect of the virus. While it is still recommended to take all the necessary precautions and stay safe, the stimulus package adopted by the government will further help in bringing the things back to the track.
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