Remember the panic buying just 2 weeks ago? Where so many people were buying so much groceries as if they have to feed one whole school? It was as if the all the supermarkets were on sale except that it was not. When the Movement Control Order (MCO) was announced, the very next day, the panic buying continued? This is despite the government kept telling people that supermarkets and even morning markets and all other essential shops like pharmacies will remain open.
Okay, I think it started normalising after the first few days. Now, the MCO is extended till 14th April 2020. I still see people buying but yeah, I think everyone realised that they could buy today, buy tomorrow and buy next week too. By the way, this panic buying did not sufficiently help the GDP growth yeah. A few bank analysts are predicting a negative GDP for Q1 2020…
Article in themalaysianreserve.com Bank Islam Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said he is expecting a -1% GDP contraction in the first quarter (1Q20) and a challenging next few quarters. He said, “At the moment, we are looking at around -1% GDP contraction and there is not much data to discern a growth. This will be the first (contraction) since 2009.” He added, “I think recession has become the base case. It’s a question of how deep the recession would be.”
AmBank Group chief economist Anthony Dass has a more dire projection. He said for Q1 2020, the economy may contract by -2.8%. He said, “The adverse impact is expected to be felt across all economic activities following a ‘partial’ lockdown by the new government in view of the increasing severity of the virus’ impact. Even prior to the outbreak of the coronavirus, the manufacturing sector has been in recession, impacted by the trade tension between the US and China.” It’s a comprehensive article. Do read it here: Article in themalaysianreserve.com
Malaysia’s top 5 trading partners are as follows: China, Singapore, United States, Hong Kong and Japan. (click here for info source) Generally, the forecasted GDP growth for Q1 2020 for all these countries are also not rosy. United States will be having a US$2 trillion stimulus to its economy which showed how serious the U.S. government is to save the country’s economy. Singapore Deputy Prime Minister announced a second stimulus package and he said, “Today, I will introduce measures worth over S$48 billion in this ‘Resilience Budget’, to deal decisively with the situation at hand.”
When all our partners are not doing that well, it may be slow for a while. I think we will have to ride this out together and if we are able to ensure that as many businesses as possible survive this period, then the chances for a quicker recovery is higher too. This is Malaysia’s second stimulus plan. RM250 billion stimulus plan to battle COVID-19. Happy staying at home.
Next suggested article: Lower GDP growth predicted for 2020. Still a positive number though