MCO 2.0 won't hit economy as hard as the first, says PM

PETALING JAYA: The government does not expect the second movement control order to have a similar economic impact to the first MCO in March last year as economic activities have been allowed to operate this time, says Tan Sri Muhyiddin Yassin.

The Prime Minister said the impact of the current MCO on the economy is expected to be manageable.

"Growth will continue to be supported by a strong export sector and global trade recovery. The economic stimulus packages, Budget 2021 and the Permai assistance package will continue to boost consumption.

“Furthermore, high impact projects and initiatives with significant economic multipliers will continue to drive the economic recovery momentum," he said during an address on Monday (Jan 18) to announce the Perlindungan Ekonomi dan Rakyat Malaysia (Permai) assistance package worth RM15bil.

Muhyiddin said a total of 22 initiatives would be implemented under Permai, anchored on the three main objectives namely combating the Covid-19 outbreak, safeguarding the welfare of the people, and supporting the business continuity.

Muhyiddin said previously that the impact of the first MCO saw the country's GDP in the second quarter of 2020 recording a significant decline with a rise in the unemployment rate.

"With the implementation of the economic stimulus packages, we managed to achieve a smaller GDP contraction rate, from 17.1% to 2.7%, and a reduction in the unemployment rate from 5.1% to 4.7% from the second to the third quarter of 2020," he said.

Muhyiddin also reassured the public and the business community that the Emergency proclamation had the sole intention of curbing the spread of the Covid-19 pandemic.

"The government will endeavour to do everything possible to ensure that the impact of these measures on the country's economy is contained. In fact, since Jan 11, it is clear that our capital markets such as Bursa Malaysia and the bond market have remained stable and orderly," he said.