Business outlook rosier after relaxations, but more needed

 

Customers returning to restaurants and retail outlets could bring smiles back to some businesses but the entertainment and tourism sectors are likely to struggle for some time. (Bernama pic)

PETALING JAYA: The recent moves to reopen parts of the economy should paint a slightly rosier picture for businesses over the rest of the year, but are unlikely to spur a dramatic reversal of fortunes unless more economy boosting policies are adopted.

Over the last week, the government announced a host of SOP updates to allow businesses like restaurants and clothing outlets to reopen for fully vaccinated patrons in Phase 1 states.

Economist Carmelo Ferlito, CEO of the Center for Market Education, said the unexpected relaxations would undoubtedly help businesses that had survived the prolonged lockdown get back on track.

“I think eateries and retail shops are the ones that are going to benefit more from the recent move,” he said. “However, the entertainment and tourism sectors are likely to struggle for some time.”

Carmelo Ferlito.

He said policy should now shift towards keeping these businesses open and allowing the country to function even in the presence of the virus so that more lives would not be ruined by lockdowns.

“A good and stable set of SOPs should be in place, including compulsory tests at business premises and schools and there should be serious investments in the healthcare system. We need to prevent the next wave of cases from causing our hospitals to collapse. If that happens, it will be our fault.”

He said Malaysia should expect GDP growth in the region of 2% if most businesses could be kept operational throughout the rest of the year.

Shaun Edward Cheah, executive director of the Malaysia International Chamber of Commerce and Industry, said businesses of all kinds should be allowed to operate as normal, provided all workers were vaccinated, .

Shaun Edward Cheah.

“The manufacturing sector is our economic engine, but what is missing is the supply chain to these manufacturers,” he said. “It’s still unclear if professional services like maintenance engineering can operate again.”

If a wider array of companies weren’t allowed to function, he added, even those that had reopened would struggle to recover effectively with their supply chain compromised.

He said the government must now adopt policies to capitalise on the expected surge in consumer demand once the economy is fully reopened. - FMT