PETALING JAYA: The government’s latest RM10bil fiscal boost offers a short-term relief for small and medium enterprises (SMEs) amid the worsening cashflow constraints among many businesses in Malaysia.
Experts’ response to the third stimulus package, which includes an additional RM7.9bil for wage subsidy programme and special grants for micro SMEs worth RM2.1bil, have been positive.
However, the extra RM10bil to be forked out by the government – on top of the total RM25bil direct injection announced in the previous two packages – was expected to widen the budget deficit further in 2020.
Commenting on the third stimulus package, AmBank Group chief economist Anthony Dass said the measures could help to reduce bankruptcies as well as sudden surge in bad loans and retrenchment of workers.
Echoing a similar view, MIDF Research said the stimulus package “kills two birds at once” by lessening the pressure on SMEs to pay employees’ compensation and ensuring employment stability.
Meanwhile, Kenanga Research pointed out that some measures in the latest stimulus package were also directed at reducing the bureaucratic hurdles faced by businesses arising from the movement control order (MCO), which is expected to end by April 14.
“An automatic 30-day moratorium, effective from the last day of the MCO, will be imposed to allow companies to submit statutory documents to the Companies Commission of Malaysia.
“Deadline for submission of financial statements is delayed to three months from the last day of MCO for companies with financial year ending Sept 30 to Dec 31,2019, ” it said in a note.
UOBKayHian Malaysia Research believed that the government has responded as best as it could to the pleas of SMEs and micro business operators.
“This fiscal package greatly enhances the earlier two fiscal packages to ensure that this economic backbone survives the Covid-19-induced financial crunch.
“The fiscal stimulus provides a timely booster for Malaysian equities in joining the global relief rally, as investors focus on hopes that the Covid-19 infection curve would be flattened in most parts of the world by April, ” it said.
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