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KUALA LUMPUR (Nov 14): The V-shaped recovery that has been achieved at this point will be derailed if the 2021 budget is not approved by Parliament, according to EMIR Research.
“MPs should and should discuss the budget all they want, but at the end of the day, please put aside all partisan sentiments and let the budget pass for the sake of the rakyat, the economy and the country,” said think tank wrote in a note published today.
Based on the findings of its latest survey for the third quarter of 2020 (3Q20), EMIR Research said that the Covid-19 pandemic is not the only factor that has exacerbated the rakyat’s concerns.
“Rather, it is more about the politicking of politicians that they are concerned about as it happens over and over again, and when it does, it will definitely have a detrimental effect on the economy,” EMIR Research warned, citing Fitch. Solutions expecting politics in Malaysia to slow economic growth in the next decade.
The expert group also opined that while a V-shaped recovery became evident from the announcement of the 3Q gross domestic product (GDP) figures, this does not mean that the country is “out of the woods or that there is a absence of massive suffering among the rakyat ”as the recovery was taking place from the negative side of the GDP curve.
Therefore, EMIR Research suggested that “an empathetic budget focused on rakyat” is still required and imperative.
Nonetheless, he believes that a sustained V-shaped recovery can only occur once a Covid-19 vaccine is found and distributed smoothly after the decision to inoculate the population.
Yesterday, Bank Negara Malaysia (BNM) announced the nation’s GDP growth in 3Q20 that showed a less pronounced drop of 2.7% YoY (YoY), compared to the previous quarter’s YoY contraction of 17.1%.
On a quarter-on-quarter basis (quarter-on-quarter), the economy in the third quarter grew by a spectacular 18.2%, compared to a 16.5% quarter-on-quarter contraction observed in the previous quarter.
EMIR Research noted that the latest GDP figures also beat analysts’ estimate of a 3.2% year-on-year contraction, and that the recovery in 3Q20 was clearly V-shaped based on annual and quarterly comparisons.
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