This is the title of the Article in washingtonpost.com. “U.S. economy deteriorating faster than anticipated as 80 million Americans are forced to stay at home.” The sub-title, “Already it is clear that the initial economic decline will be sharper and more painful than during the 2008 financial crisis.” Perhaps the writer is using the title to attract readers? Perhaps the situation is not as dire? Then, I realise that if our current Movement Control Order (MCO) does not work, it may also turn as bad. Just as many SMEs in the U.S. may not survive a prolonged shutdown, the same can be said of the SMEs in Malaysia too.
Anyway, coming back to the Article in washingtonpost.com, some points included that roughly 3 million Americans have filed first-time claims for unemployment assistance and this is 4 times higher than the depths of the 1982 recession according to Bank of America Merrill Lynch. Meanwhile a JPMorgan Chase economist told clients on a conference call Friday that the jobless rate may spike from 3.5 percent to 20 percent. There is a possibility that the economy will shrink over the next three months at an annual rate of 30 percent. Many examples of employees living from paycheck to paycheck were also presented in the article showing how tough it would be for these employees once the economy stalls. Please do read the full Article in washingtonpost.com for more details.
The U.S. may need a recovery package of up to US$2 trillion to save its companies and its economy. Earlier article here. Meanwhile Bank Negara Malaysia has already reduced the Overnight Policy Rates twice this year and it’s just March currently. Earlier article: Rates are cut again. Nearly lowest in 10 years. It has also dropped the Statutory Reserve Requirement from 3% to just 2% and this has helped to release more funds to the banks. Article with my views in focusmalaysia.my here.
As for the government, this was the earlier announced stimulus which the new Finance Minister will have to follow through very closely and perhaps even deciding if the current stimulus is just not deep enough. Meanwhile the MCO has not even reached the halfway point. Let’s just hope everything is under control and that the number of infections could soon reach the peak. Let’s also wish that some of these people who did not think objectively about the MCO will now repent and stay at home instead. Happy following.
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