The combination of government spending, businesses recovering and household confidence (in purchasing non-essential items) will create a synergistic effect.
Furthermore, the current economic uncertainty where businesses across multiple sectors had to shut down and let go of their staff, coupled with salary cuts across the board has forced many Malaysians to be cautious and tight-fisted with their spending.
He elaborated that it is highly critical for the government to quickly roll out a spending plan that will help sustain private investor confidence, that the economic contraction in the second and third quarter is likely shallow and temporary.
Professor Yeah Kim Leng, who is a director of the Economic Studies Programme at the Jeffrey Cheah Institute on South-east Asia, said that it will require the “synergistic effect” of government, businesses and household spending to reinvigorate confidence in Malaysia’s economy.
They predict that it will only see a resurgence if the government can roll out a sustainable post-Covid-19 economic plan to help businesses hit hard by the global pandemic.