13 October 2020
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To date, three (3) economic stimulus packages totaling RM280 billion (USD63 billion) have been announced by the Malaysian government to mitigate the economic risks arising from the COVID-19 pandemic. This demonstrates the commitment of the government in prioritising the well-being of the Malaysian citizens while also ensuring the survival of businesses impacted by COVID-19.
The packages were announced in three (3) different periods and they are designed based on three (3) main thrusts:
1. Economic Stimulus Package announced on 27 February 2020
Summary: The Malaysian Government announced a RM20 billion Economic Stimulus Package to mitigate the impact of COVID-19 outbreak and reinvigorate the growth of the Malaysian economy.
Purpose: Protecting the welfare and well-being of Malaysian citizens by catalysing citizen-centric economic growth.
- Boost household spending
- Implement people-centric projects
2. PRIHATIN Economic Stimulus Package (ESP) announced on 27 March 2020
Summary: The Malaysian Government announced the PRIHATIN Economic Stimulus Package, injecting an additional RM230 billion into the economy.
Purpose: Supporting business by mitigating the impact of COVID-19:
3. PRIHATIN SME Economic Stimulus Package (PRIHATIN SME+) announced on 6 April 2020
Summary: The Malaysian Government announced an additional allocation of RM10 billion to further support businesses, particularly SMEs.
Purpose: Strengthening the nation’s economy by promoting quality investment:
- Leverage on public investments
- Provide incentives to encourage private investment
- Ease cashflow of businesses
- Assist affected individuals
- Stimulate demand for the domestic travel and tourism sector
Some of the stimulus measures, which have yet to be passed in Parliament, will be discussed in the subsequent articles in this series.
The primary core of the economic stimulus packages is to enhance cashflow for households and businesses. Nonetheless, deferring rather than waiving payment obligations merely delays the inevitable and may result in a snowballing effect post-Movement Control Order (MCO). It is no doubt that most businesses’ ability to perform binding contractual and other obligations has been impaired.
It remains to be seen whether appropriate legislations will be passed to address these issues to prevent any costly disputes and litigation after the MCO period.
For further information, please contact:
Hao Min Loo, Consultat, JC LEGAL
info@jcco-hk.com
