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Thursday, May 12, 2022

Guan Eng criticises govt over lack of 'real economic policy'

 


DAP chairperson Lim Guan Eng has blasted the government for its lack of decisive economic policy, in response to rising economic strife in the country.

This comes after an announcement by Bank Negara Malaysia (BNM) yesterday, increasing the overnight policy rate (OPR) by 25 basis points to 2.00 percent.

“The government needs to offer assistance to these key sectors and quickly overcome severe labour shortfalls as well as address the impact of rising prices caused by supply shortages as well as the weakening ringgit.

“Whilst the government has refused to listen to economic suggestions put up by the opposition, there is still no real economic policy planning apart from allowing the withdrawal of EPF savings of up to RM10,000, which has pumped more than RM40 billion into the economy,” he said.

“However, what is the government planning to do when the RM10,000 is used up or the RM40 billion EPF-induced injection dries up?” asked the Bagan MP.

Prime Minister Ismail Sabri Yaakob previously announced the government will allow contributors to withdraw up to RM10,000 from their EPF savings.

He said this decision was based on research on the ongoing recovery phase of the Covid-19 pandemic as there are still those who are financially affected and trying to rebuild their lives.

Before that, the government had allowed three other withdrawals of EPF contributions through three schemes - i-Lestari, i-Sinar, and i-Citra, amounting to RM101 billion, involving 7.34 million contributors when the pandemic hit in 2020.

Lim suggested that with the two percent OPR boost, inflation and rising prices will pose a larger economic challenge than sustaining economic recovery.

“However, sustainable economic growth for 2022 could well be impeded by a weak ringgit and structural problems relating to an acute worker shortage in key sectors of the economy as well as lack of institutional reforms that promote transparency and accountability,” said Lim.

He noted that the impact of the Malaysian ringgit’s current dip came unexpectedly with the rising global prices of oil and basic commodities.

“At the same time, economic growth is spotty with many key sectors such as tourism, hotel, entertainment, and recreation as well as SMEs still struggling to survive to reach the 2019 level.

“For the public, rising prices are not mitigated by rising wages,” he said.

Following the OPR increase, the ceiling and floor rates of the corridor of the OPR will be correspondingly increased to 2.25 percent and 1.75 percent, respectively, BNM said in its monetary policy statement yesterday (May 11).

Over the course of the Covid-19 crisis, the OPR was reduced by a cumulative 125 basis points to a historic low of 1.75 percent to provide support to the economy. - Mkini

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