KUALA LUMPUR – Malaysian Prime Minister Muhyiddin Yassin said on Wednesday that the government will embark on an expansionary budget to ensure people’s prosperity and economic revival amid the Covid-19 pandemic.
During a television interview, Prime Minister Muhyiddin said that the first focus of budget 2021 will be to fight Covid-19 in the health aspect, therefore it is important that the funds will be chanelled towards handling the pandemic and providing support to the frontliners.
The prime minister said that the government will continue to do it until the Covid-19 pandemic is over.
The budget is said to be a continuity from the four stimulus packages worth RM305 billion that was recently announced.
The additional assistance under the RM10 billion PRIHATIN Supplementary Initiative Package on the otherhand, will be the government’s response to boost the economic recovery.
The KITA PRIHATIN package is an extension from the PRIHATIN, PRIHATIN SME PLUS and PENJANA package worth RM295 billion with an additional fiscal injection by the government totalling RM45 billion.
Bank Negara Malaysia recently revised it’s 2020 GDP growth projection from -5.5 to -3.5 per cent from -2 to 0.5 per cent previously with the initial assumption based on the lockdown period of only 4 weeks instead of 7 weeks.
The economy is forecasted to recover a growth of 5.5% to to 8% in 2021.
The budget will be part of the 6R plan developed by the government namely Resolve, Resilience, Restart, Recovery, Revitalise and Reform.
The 2020 Budget approved last year was worth RM297 billion.
This year’s budget will also focus on helping the vulnerable, both individual and micro enterprises deeply affected by Covid-19.
The government plans to propose incentives to attract Foreign Direct Investments (FDI) to help boost the ailing economy. The incentives not only focuses on 2021 but also in the year 2022.
Malaysia currently ranked 12th in the World Bank’s Ease of Doing Business for 2020 with approved DI in 2019 amounted to RM82.4 billion. Muhyiddin said that the 2021 Budget will be the most comprehensive budget the government has planned.