While Malaysia’s debt-to-gross domestic product (GDP) ratio may hit the 55 percent statutory limit by year-end, the Malaysian Industrial Development Finance (MIDF) group managing director Datuk Charon Wardini Mokhzani said that the cap is”self-imposed” and can be changed through parliament if the need to ensure the well-being of the people arises.
Datuk Charon also said that technically, the legislative body could increase the debt limit. This will ultimately depend on what the legislative body had to say; and for the time being, the nation would wait for that decision.
According to the MIDF, there are a number of sectors that are thriving in the ‘new normal’ that has been brought about by COVID-19. Some of these positively affected sectors include information technology infrastructure, equipment manufacturer, software developer, cloud-based, glove, personal protective equipment, medical equipment, online education provider, and e-commerce.
Meanwhile, sectors which are neutral are manufacturing and food processing, while negatively impacted sectors are retail, food and beverages, tourism, airlines, entertainment and shopping malls.
According to the MIDF, the COIVD-19 pandemic has affected a wide spectrum of business sectors. The implementation of lockdowns and movement control orders further aggravated the situation. No businesses were spared, from the largest of MNCs to the smallest of SMEs. There are five main clusters of issues that were brought about by the pandemic – pressure on cash flows, loans available but not easily accessible, logistics and port issues, supply chain disruptions and constraints in meeting increasing demand.
Development finance head Azizi Mustafa highlighted that in terms of accessibility to finance, the government had announced close to RM300 billion (US$70.1b) worth of stimulus packages to help the economy and businesses to continue.
Malaysia has funded these stimulus packages – the RM260 billion (US$60.8b) Prihatin package and RM35 billion (US$8.2b) Penjana package – to lift the nation up from further economic deterioration.