PETALING JAYA: Almost all sectors in the country have recorded major losses since March except for the rubber, palm oil, medical and ICT industries, the Department of Statistics Malaysia (DOSM) said in a report released today.
It said geopolitical and socioeconomic stability was important to increase confidence among investors, adding the present global uncertainties will more likely eliminate any chance of investments from abroad.
Chief statistician Mohd Uzir Mahdin said with all the initiatives and policies taken to cushion the impact of Covid-19 and to speed up recovery, what matters most would be to maintain the rakyat’s livelihood and increase the number of jobs with satisfactory wages.
“This can only be done with close monitoring and implementation of all the initiatives to ensure what has been planned will reach the intended people and businesses,” he said during the release of the Malaysia Economic Statistics Review (MESR) volume 2/2020 report.
Uzir further said the manufacturing sector had always been the key driver of the country’s economy but it was strongly dependent on the rest of the world, noting a major drop in decades.
He warned that the manufacturing sector was not expected to recover swiftly.
Manufacturing exports declined 23.8% to RM64.9 billion in April 2020, recording the largest decline since September 2009 during the global financial crisis. Imports dropped 8.0% to RM68.4 billion, resulting in a trade deficit for the first time since October 1997 at RM3.5 billion.
This caused Malaysia’s unemployment rate to spike at 5.0% with almost 800,000 jobless people compared to a year ago, he added.
“The government has to consider mobilising other sectors to compensate for the short-term losses,” Uzir said
He asked the government to focus on agriculture, household-related services and small-scale construction activities.
“It is an opportune time for us to give more focus to food-based agricultural products such as rice, fruits, vegetables, poultry and dairy, which are largely imported at this juncture.”
He proposed to the government to use a pool of talents, especially high-quality graduates, for the country to continue innovating the agriculture sector, backed by the private and public sectors.
He further asked Putrajaya to help the tourism sector by encouraging domestic tourism. This could be done by restoring the confidence of businesses in Malaysia for a swift economic recovery, he said.
Uzir said the Malaysian Rubber Glove Manufacturers Association (Margma) is expecting exports of Malaysian rubber gloves to increase 20% to 230 billion pairs this year, an increase of 192 billion pairs from the previous year.
“Global demand for rubber gloves is expected to increase by 15-20% as compared to the usual demand growth of 8-10% due to the Covid-19 pandemic,” he said.
However, in the long run, he said Putrajaya needs to review business models for SMEs to help them sustain their business as the sector has to intensify profits and drive the country’s economy.
Production of crude palm oil in May 2020 also rose by 18.3% with 1,651 million tonnes in April 2020, the report said.
The Industrial Production Index dropped drastically with manufacturing industries dipping by almost 40%, especially in products involving metals, electrical and electronics, petroleum, chemicals and plastic.
The report also said the value of wholesale and retail trade for April shrunk significantly by 36.6% as compared to the same month last year. This was the biggest decline in decades. Retail sales fell by RM45 billion.
The biggest fall was registered in the motor vehicle sub-sector which recorded a 100% drop in sales in April.
The Asian Development Bank (ADB) has revised downward its growth forecast for the Asian region to 0.1% in 2020 from 2.2% projected earlier in April.
The economic activity in Southeast Asia is expected to contract by 2.7% this year before growing by 5.2% in 2021, the bank had said.
Contractions are forecast in key economies for 2020 particularly Indonesia (-1.0 %), the Philippines (-3.8 %), Thailand (-6.5 %) and Malaysia (-4.0%) while Vietnam is forecast to grow by 4.1%.
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