Experts call for targeted stimulus for Malaysians

 

The government should consider a targeted approach if it plans to roll out a stimulus package to help Malaysians cope with rising prices triggered by the Middle East crisis, economists and an industry group said. (Inset from left: Chin Chee Seong, Mohd Afzanizam Abdul Rashid and Dr Geoffrey Williams). - NSTP file pic

KUALA LUMPUR: The government should consider a targeted approach if it plans to roll out a stimulus package to help Malaysians cope with rising prices triggered by the Middle East crisis, economists and an industry group said.

They said priority should be given to vulnerable households and businesses, particularly micro, small and medium enterprises (MSMEs), amid rising costs and global uncertainty.

SME Association of Malaysia national president Chin Chee Seong said early and focused intervention was necessary to ease cash flow pressures and prevent business closures.

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"We support a targeted six-month moratorium or deferred repayment arrangement for MSMEs facing sudden financial strain due to rising logistics costs, weakening demand, export uncertainty and supply chain disruptions."

Chin said such measures were vital to preserve working capital, protect jobs and avoid a wider wave of defaults.

He also called for the expansion of emergency financing under the Entrepreneur Development and Cooperatives Ministry, noting that the current RM100 million allocation — split between SME Bank's SUCCESS programme and Bank Rakyat's BR Prosper-i scheme — was insufficient.

"In the face of a possible nationwide shock, this scale is too small.

"The allocation should be increased to at least RM500 million, with simplified application processes, faster approvals and prioritisation for viable MSMEs facing temporary pressure."

Chin said MSMEs required affordable and immediate liquidity to meet short-term operational needs such as wages, rent, utilities, supplier payments, freight costs and stock replenishment.

He also urged the government to strengthen the Syarikat Jaminan Pembiayaan Perniagaan (SJPP) guarantee scheme and ease collateral requirements, as many small businesses continue to face difficulties in securing financing despite being viable.

On rising costs, Chin said fuel price stabilisation measures must be maintained, noting that the subsidised RON95 price remained critical in cushioning businesses from external shocks.

"Fuel inflation quickly feeds into transport, freight, delivery, food and overall operating costs within the MSME ecosystem."

Chin also proposed temporary flexibility in loan restructuring and rescheduling without punitive charges, particularly for businesses affected by rising oil prices, shipping disruptions and weaker export demand.

Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the stimulus package must be carefully targeted at the groups most affected.

"The primary issue that needs to be addressed is the adequacy of fuel and food supply, which is fundamental as it determines the level of economic activity."

Afzanizam said identifying the most affected groups was key, as it allowed the government to channel support where it was needed and prevent wastage of public funds.

He said assistance should also be prioritised for businesses in the moderate and weaker financial categories.

"Support could include improved access to financing for working capital, tax relief measures, or deferred tax payments. These measures would help prevent unnecessary business closures and job losses."

Afzanizam also stressed the importance of strong price monitoring to curb excessive profiteering.

"Any stimulus package should be carefully targeted. Blanket measures risk inefficiency or, worse, open opportunities for misuse of public funds.

"Targeted interventions can stabilise the economy without overburdening the nation's coffers," he said.

Economist Dr Geoffrey Williams said there was no clear justification for a broad stimulus package at this stage, warning that using current global uncertainties to push Covid-19-style measures could be risky.

"People remember the previous stimulus packages, which led to widespread corruption, court cases, wastage, leakages, and theft.

"EPF withdrawals also wiped out retirement savings and caused long-term damage to the economy," he said.

Williams said high oil prices were not unusual and Malaysia was actually benefiting.

"Petrol prices are stable, diesel subsidies remain in place, and supplies of food and other essentials are sound.

"Inflation is low at 1.4 per cent, and even with some price increases, it remains within historical norms.

"Economic activity is normal, income and spending are steady, exports and net trade are strong, and the ringgit is stable," he said.

Political secretary to the finance minister, Muhammad Kamil Abdul Munim, on Saturday had said that the government might introduce an economic stimulus package to mitigate the economic impact from the tensions in the Middle East.

He said stimulus measures would be similar to those rolled out during the Covid-19 pandemic. - NST