Pemulih aid package timely


Dr Yeah Kim Leng, professor of economics at Sunway University, said the new aid package is broad-based and covers more sectors for aid support. “The aid is timely given that the lockdown is extended with an uncertain transition to the next stage of the NRP, ” he said.

PETALING JAYA: The Pakej Perlindungan Rakyat dan Pemulihan Ekonomi (Pemulih) aid package worth RM150bil is seen as timely by economists and fund managers in view of the country still in phase one of the National Recovery Plan (NRP).

Among the highlights of the Pemulih aid package are the continuation of the Wage Subsidy Scheme for the fourth time with an allocation of RM3.8bil, which is expected to benefit more than 2.5 million workers, as well as the Employees Provident Fund (EPF) introducing a new withdrawal facility called i-Citra, where a total of 12.6 million EPF members can make withdrawals of up to RM5, 000 with a fixed payment rate of RM1, 000 per month for five months.

There is also a six-month loan moratorium for all borrowers, regardless of whether they are from the B40, M40 or T20 groups. Borrowers will only need to apply and approval will be given automatically by the banks. It will be made available to borrowers from July 7, 2021.

Dr Yeah Kim Leng, professor of economics at Sunway University, said the new aid package is broad-based and covers more sectors for aid support.

“The aid is timely given that the lockdown is extended with an uncertain transition to the next stage of the NRP, ” he said.

However, Yeah cautioned that the aid is only temporary as well as limited, compared with the loss of income and jobs.

“The aid may not be adequate to sustain businesses affected by the lockdowns so the government will still need to monitor closely highly distressed businesses.

“Quick disbursement is also important to ensure those affected can put food on the table as well as for businesses to sustain their employees, ” he said, adding that the loan moratorium would help to relieve the financial burden of those whose businesses have not been allowed to operate.

Alliance Bank chief economist Manokaran Mottain said the Pemulih aid package was the result of the government trying to make the best out of an extraordinary situation.

“It is a delicate situation trying to balance the welfare of the people, and financial constraints. Allowing more EPF withdrawals would further deplete the retirement savings of the lower income groups. Given that their income is low, their savings most likely is low too, ” he said.

Regarding the loan moratorium, Areca Capital Sdn Bhd chief executive officer Danny Wong said, “If history repeats itself, some of the money will flow into the stock market.”

Rakuten Trade head of equity sales Vincent Lau agreed and said this might improve sentiment, participation and trading volume on the local bourse.

“While this may see more money flowing into equities, I do not think this will see the market returning to the ‘hot’ levels of 2020.

“Those who want better yield and investment returns may invest some of the extra disposable income as the fixed deposit rates are low.

“They could buy blue chips that have been beaten down, ” said Lau.

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