Prime Minister Tan Sri Muhyiddin Yassin announced that Malaysia will extend its Movement Control Order, MCO, until May 12. Accordingly, this remarks the fourth phase of the movement that has started since March 18.
Following the current MCO extension, PM Muhyiddin is open for possibilities that there will be another extension. Depending on the situation, another extension might be into effect should the coronavirus cases in the country keeps escalating rapidly .
This extension will last during Ramadan season, in which Malaysian Muslims are fasting for a month. Normally, bazaars are present during the season and people gather to buy foods and beverages. That, however, will be completely different this year.
In addition, Ramadan also includes a tradition of mass-exodus in which people are visiting their relatives in their respective hometowns. However, government has announced that people are not allowed to conduct such travels.
“I do not deny the possibility that the MCO would be extended again after this,” said the Prime Minister. “This means that, brothers and sisters, you all may not be able to celebrate Hari Raya in your villages.”
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UOB Kay Hian: Malaysia MCO Extension Has Economic Consequences
UOB Kay Hian predicted that the MCO extension will bear grave consequences to the country’s economy. The consequences vary, ranging from business operations, consumption trends, to investments.
In addition to the statement, UOB Kay Hian is also afraid that the MCO effect will last far longer than the movement itself. Instead, the economic effect might still be impactful even during the Post-MCO.
Even during the MCO, the institution argues that Malaysia’s economic condition was already unstable, thanks to the latest sudden general election. Additionally, the two-month MCO will indubitably worsen it.
UOB Kay Hian is also skeptical that the restriction will be over soon. Accordingly, they believe that Malaysia might not be able to mitigate the upcoming transmissions due to the absence of mass COVID-19 testing.
With the extension, Malaysia’s direct fiscal injection amounts to approximately 2.4% of GDP, lower than other developed countries with shorter lockdowns. Another concern includes the possible rise of unemployment in the country, which might go beyond 4% baseline.