Another lockdown will upset economic growth

Datuk Dr Madeline Berma

KUCHING: Another complete lockdown in the country will upset economic growth, severely impacting businesses and push up unemployment rate, said economist Datuk Dr Madeline Berma.

She said if Malaysia decided to impose another lockdown, the country’s gross domestic product (GDP) would definitely be affected.

“A lockdown will also affect the government’s objective of trying to recover the economy. This is because the government anticipates achieving six to seven percent economic growth this year,” she told New Sarawak Tribune today.

She said there must be other alternatives than imposing a total lockdown as this would have serious consequences.

“Secondly, a lockdown will lead to an increase in unemployment rate. Just last year after the movement control order (MCO) was imposed in March, the unemployment rate in May was at 5.3 percent.

“This means that almost one million people are unemployed. And if we are under another lockdown this year, the unemployment rate may go above 5.3 percent.”

Madeline also said with another lockdown, the government’s various economic stimulus packages totalling billions of ringgit to cushion the Covid-19 impact would go to waste.

“This is because all those packages are meant for economic recovery, and we have to restart all over again.

“Another lockdown means another new economic stimulus package to address the lockdown. Therefore, this will lead to a fiscal deficit where the country’s expenditure is more than our income.”

She explained further that when there was a fiscal deficit, this would lead to another impact where the country’s international ranking would be affected.

“On Dec 4, Fitch Ratings revised Malaysia’s Long-Term Foreign Currency Issuer Default Rating (IDR) from ‘A-‘ to ‘BBB with a stable outlook’ following the Covid-19 crisis.

“Now, when this (international ranking) is being downgraded, it will affect international investment, trade, and how the international communities perceive our country.”