GDP to drop by 0.8% to 1.2% because of Covid-19, says PM

Front desk staff at a hotel wear face masks as a precaution against Covid-19. The tourism sector has incurred a loss of some RM3.4 billion as a result of travel disruptions caused by the virus.

PETALING JAYA: Putrajaya is estimating a drop in the country’s gross domestic product (GDP) of between 0.8% and 1.2% following the Covid-19 pandemic, the prime minister said today.

Muhyiddin Yassin said this represents a decline of between RM10.8 billion and RM17.3 billion.

In a special address to the nation on the outbreak, he also said the tourism sector incurred a loss of RM3.37 billion from January to February.

Muhyiddin said he was aware that measures needed to be taken to cushion the impact of the outbreak on Malaysia’s economy.

“The government will ensure that the stimulus package announced earlier would be implemented so the benefits could be felt immediately,” he said.

He said a special task force led by the health ministry had been formed to ensure Putrajaya was prepared for any eventuality, and that he had been briefed daily on the latest developments.

“I have also been assured that the supply of necessity goods is sufficient,” he said, acknowledging that the worst-hit sectors were tourism, small-medium enterprises and transportation.

Muhyiddin also said travel bans on the Hubei, Jiangsu and Zhejiang regions in China were still in place, as well as Hokkaido in Japan, Italy, Iran and South Korea.

He said cruise ships would only be allowed to dock in the country to replenish supplies, and only Malaysian crew members were allowed to depart the ships, and they were required to go through health screenings.

Separately, an aide to the prime minister told FMT the expected drop of 0.8% to 1.2% in GDP is an estimate for the full year of 2020.

This translates to a GDP growth of 3.6% to 4.0%, instead of the earlier forecast of 4.8%, he said.