The government is maintaining its National Recovery Plan (NRP) timeline and expects to reopen most of the economy by the end of the year.
Presently, eight states are in Phase 2 while another eight states and territories are behind the NRP’s target and remain in Phase 1.
Putrajaya also hopes to transition from financial assistance packages like the National People's Well-Being and Economic Recovery Package (Pemulih) to focus on encouraging “resilience” in Budget 2022.
This is according to the Finance Ministry’s National Budget director Johan Mahmood Merican (above).
In a conversation with Malaysiakini CEO Premesh Chandran on the audio chat platform Clubhouse last night, he indicated that stimulus packages will end this year.
“The total of the eighth (stimulus) packages add up to an amount of RM500 million, of which a bit more than half has been injected into the economy. So, there is still some leftover value from the earlier packages in conjunction with Pemulih.
“But that’s really focused towards providing support until the end of the year. Certainly (there) needs to be continuity going into 2022,” he said on the “tell me about Pemulih” session that was organised by KiniEvents, Malaysiakini’s in-house events arm.
Late last month, Prime Minister Muhyiddin Yassin unveiled various initiatives under Pemulih - Perikatan Nasional’s largest stimulus package since Mar 2020’s Prihatin.
Asked if the government will continue providing financial aid past this timeline in light of indefinite lockdowns and record Covid-19 infections, Johan pointed to constraints and the rising national deficit.
“Certainly, our resources are not infinite. As you know, the government has already, to some extent, stretched our financial resources [..]
“We had Budget 2021 tabled with a targeted fiscal deficit of 3.2 percent at the end of the year. With the government taking proactive measures to launch the various packages, it almost doubled to a deficit of 6.2 percent (last year). Our ministry has indicated that we expect our deficit this year to be also in the 6.0 percent range.
“So certainly, we are having some constraints in terms of what can be fiscally afforded but I think at the same time, the government also recognises this is a crisis. Thus, if the need arises, the government recognises its responsibility and is certainly committed to assisting as the need arises,” he answered.
Budget 2022
Johan also indicated what the rakyat could expect in Budget 2022.
A key theme will be an economic recovery, and he mentioned support for “export net growth” and “domestic consumption”.
“Another key feature of 2022 is focusing on resilience. The crisis has exposed vulnerabilities, in particular, our healthcare capacities. That is an area for investment.
“In addition to that, we see how the crisis has hit the vulnerable, especially the informal sector. Another key factor for building resilience perhaps would be ensuring that we strengthen social protection.
“To better cater not just those in poverty, but also those in the informal sector,” he elaborated.
Aside from recovery and resilience, he added that “reforming” the economy to drive competitiveness will also be a feature.
NRP
As for the NRP, Johan said the government was holding on to its target of moving into Phase 4 by the end of 2021.
The plan has four phases. Progress to the next phase is based on hitting thresholds for three main indicators: The average number of daily new Covid-19 cases, nationwide ICU bed capacity and what percentage of the population has been fully vaccinated.
The official explained that the plan is expected to dovetail with Pemulih and the National Covid-19 Immunisation Plan (NIP) to guide the country back to relative “normalcy” with help from Budget 2022.
“Where it is as much as possible (for) a return to normalcy, we project and target this to be achieved - in terms of the phase transitions up to Phase 4 - before the end of the year.
“This is in conjunction with the NIP which we target (60 percent) of the adult population to be vaccinated before the end of the year.
“That is the sort of timeline in which the NRP is framed. So certainly Pemulih (will) work in conjunction with many of the other packages that we announced earlier,” he said.
“(With the) NRP, by the end of the year (we) hope (we) can achieve a reopening of our economy as much as normal.
“And then (we will) go into Budget 2022 and the 12th Malaysia Plan (to see) how we can drive economic recovery and strengthen the resilience of our economy and social systems,” he elaborated.
Meanwhile, Johan appeared unperturbed by concerns that political instability in the country was compromising investor confidence in the NRP.
He pointed to how PN has been working with opposition-led state governments to bring in investments.
Johan also defended the NRP’s “clear threshold values” and the government’s move to aid in reopening the economy by allowing employers to pay for employee vaccinations.
“We have had changes in government from BN to Pakatan Harapan, to PN.
“Even though the different governments and political parties may have different views on many matters, there has always been consistency across the political spectrum when it comes to a commitment to being business-friendly, focused on investors and supporting the ease of doing business,” he said. - Mkini
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