THE impact of the second movement-control order (MCO2.0) on the economy will not be as adverse as the previous round of movement curbs enforced in March last year, Prime Minister Muhyiddin Yassin said today. 

“The government does not expect an impact similar to the second quarter of 2020 as the implementation of the current MCO sees more economic activities being allowed to operate,” he said while announcing the Permai economic stimulus package today. 

“As such, the impact of the current MCO to the economy is expected to be manageable,” he added. 

Reeling from the impacts of the first MCO, Malaysia recorded its worst gross domestic product growth since the 1997/98 Asian Financial Crisis after the economy contracted by 17.1% in the second quarter of 2020.

However, the economic stimulus packages announced last year helped the country narrow the GDP growth contraction to 2.7% in the subsequent quarter while unemployment rate fell from 5.1% to 4.7%. 

The strong export sector and the recovery in global trade will continue to support economic growth, Muhyiddin said. 

Additionally, Budget 2021 and Permai economic stimulus packages will continue to boost consumption while high impact projects will have a significant multiplier effect on the momentum of economic recovery. 

The government’s existing funds will be re-allocated based on current priorities and through more prudent spending to finance the RM15 billion Permai economic stimulus package.

Muhyiddin reiterated the announcement of the MCO and the emergency proclamation is solely to contain the spread of Covid-19. 

“The government acknowledges the implementation of MCO, coupled with the declaration in force from January 11 to August 1 may have raised some concerns among the people and the business community.

“I would like to emphasise once again, that this declaration of emergency is with the sole intention of curbing the spread of the pandemic, which is currently the biggest threat to the socioeconomic development of the country,” he said. 

He assured Putrajaya will do “everything possible” to ensure the impact of these measures on the country’s economy is contained. 

He also said Bursa Malaysia and the bond market have remained stable and orderly since the announcement on January 11. – January 18, 2021.