MP SPEAKS | RM45b stimulus needed after unemployment rise and lower production

MP SPEAKS | An additional RM45 billion economic stimulus package is urgently needed for Budget 2021 to save jobs following the unexpected rise in the unemployment rate to 4.7 percent and the contraction of the industrial production index (IPI) by 0.5 percent in October 2020.

The Department of Statistics Malaysia (DOSM) recently announced there were 748,200 unemployed persons in October, an increase of 0.1 percent to 4.7 percent in October compared to 4.6 percent in September.

The country’s year-on-year (y-o-y) IPI contraction in October 2020 by 0.5 percent was a surprise following three consecutive months of growth in July, August, and September, as the nation contended with the economic impact of the Covid-19 pandemic. DOSM said prior to the IPI’s y-o-y 0.5 percent contraction in October 2020, the IPI grew 1.2 percent in July, 0.2 percent in August, and one percent in September.

Many had expected unemployment to drop and IPI to continue growing in October following the easing of Covid-19 movement restrictions. The 748,2000 unemployed persons appear to match Human Resources Minister M Saravanan’s prediction of one million unemployed Malaysians by September, including both the informal sector, school-leavers, and new university graduates.

Clearly, the anticipated economic recovery from improvements in global economic growth and trade has...