An economist says there is no need for exceptional measures to stimulate the economy because of the coronavirus outbreak.
The Federation of Malaysian Manufacturers recently proposed that SST be reduced by 2% for 12 months and employees’ EPF contribution by 3% to boost business conditions and domestic consumption as a way to minimise the impact of the coronavirus outbreak on the economy. “You can be more targeted compared to giving tax cuts to wealthier, big spenders,” he said, adding research has indicated that transfers to lower-income households have greater impact compared to transfers to higher-income households.In the longer-run, he added strengthening and improving initiatives which supported the people when economic conditions worsen, such as unemployment insurance and BSH would be beneficial as they are targeted at the most vulnerable households.
“The coronavirus is a medical emergency, by the time the FMM’s proposed measures are implemented, we may already be out of the situation. If people don’t panic, the virus would affect few industries such as aviation and tourism.”