Tengku Zafrul: Malaysia on the cusp of recovery

KUALA LUMPUR: Malaysia is on the cusp of recovery, driven by the National Recovery Plan (NRP), the upcoming Budget 2022, and the recently announced Twelfth Malaysia Plan, Finance Minister Tengku Datuk Seri Zafrul Aziz said on Thursday.

Underpinning the recovery, he said, was the NRP, where "we have begun seeing the green shoots of recovery in the wider economy".

Speaking at the Invest Malaysia 2021, he pointed out several solid factors which underpinned the recovery.

Zafrul pointed out firstly to a stronger GDP growth in the second quarter of 2021, including a 40.1% and 19.8% growth in the months of April and May 2021, respectively.

Secondly, there are improvements in the labour market with unemployment improving to 4.6% in August 2021 from 5.3% at the height of the pandemic.

Thirdly, there is an an increase of 6.8% year-on-year in manufacturing sales value to RM126.5bilas at August 2021.

Fourthly, there was an uptick in trade activities, including a 23.0% year-on-year increase in exports to RM97.3bil in August 2021.

Fifthly, there are continued improvements in the capital markets, with about RM2bil in net inflows from foreign investors in the equity capital markets in August and September.

As for the sixth factor, he said Malaysia continued to attract of high-value, high-tech investments including RM107.5bil in foreign direct investments (FDI) and domestic direct investments (DDI) in the manufacturing, services,and primary sectors in the first half of 2021, a near 70% increase over the previous corresponding period.

"This recovery is bolstered further by a resilient financial sector. Banks, insurers and takaful operators continue to be well-capitalised, with sufficient financial buffers to absorb potential losses in the face of severe macroeconomic and financial conditions, while supporting economic recovery.

"For the banking sector in particular, this support included RM154bil in bank financing disbursed to SMEs in the first half of 2021," he added.

Zafrul also pointed out that to maintain livelihoods, the government introduced eight assistance packages in addition to Budget 2021 throughout the pandemic.

He said over RM340bil has been disbursed as of September 2021, saving 2.7 million jobs while benefiting over 20 million rakyat and 2.4 million businesses.

"Approximately RM300bil remain for the rest of the year, including an additional RM10bil worth of direct aid for B40s, M40s, gig workers, the hardcore poor, and the unemployed," he added.