THE GOVERNMENT CAN SPEND MORE
Business Today Malaysia|November 2020
The Malaysian economy is recovering quite decently although the level of pessimism are still prevalent. For starters, the monthly GDP series saw smaller contraction in June at -3.2 percent from 28.6 percent in April. This is understandable as the Movement Control Order (MCO) was in full blast from March 18 to early May. The total industry volume (TIV) for the automotive sector jumped from an all-time low of 141 units in April to 22,960 units in May and accelerated further to 56,444 units in September.
DR MOHD AFZANIZAM ABDUL RASHID

The unemployment rate also fell from 5.3 percent in May to 4.7 percent in August with the number of unemployed person dropped from 826k in May to 741k during August. The Leading Index which shows the future direction of the economy grew 7.6 percent in August, the fourth consecutive months of positive increases, suggesting the economic activities are picking up its speed in the immediate terms. The JP Morgan Global Composite PMI rose to 52.1 points during September and it has stayed above 50 point demarcation line which separate the expansion (>50) and contraction of business activities, for three months in a row.

Despite that, the latest RAM Business Confidence Index (RAM BCI) fell dramatically to 33.7 points for the third quarter of this year which is significantly below the 50-point threshold. Almost 90 percent of the survey’s respondents indicated that fragile economic conditions as their main challenges in the next three months. According to the RAM survey, loan moratorium is highly sought after assistance with 86 percent of the respondents have taken up the offer.

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