Implications of PKP 2.0 on the Malaysian Economy - Kakiforex | Forex markets for the smart money. Implications of PKP 2.0 on the Malaysian Economy Implications of PKP 2.0 on the Malaysian Economy

February 24, 2021

Implications of PKP 2.0 on the Malaysian Economy

 The Second Movement Control Order (PKP 2.0) in several major economic states will affect the country's economic growth this year.

According to Bernama, the matter was raised by financial research firm, Moody’s Analytics.

According to Moody’s Chief Asia-Pacific Economist, Dr. Steve Cochrane, PKP which is being implemented in key economic areas such as Selangor, Kuala Lumpur, Penang and Johor covers 60% of the country's economy.

The Klang Valley alone holds 40% of Malaysia's economic activity and he stressed that Malaysia was not in a recession but strict policies had sparked some risks of economic slowdown.

"There are some countries that I am most worried about. We have classified Malaysia as one of the risky. Malaysia is having trouble controlling the spread of Covid-19 after initially successfully controlling the pandemic.

"The Philippines and Indonesia are two other countries that have problems managing Covid-19," he said during a webinar on global economic prospects with a focus on the recovery of Asia Pacific today.

Cochrane added that the Philippines and Indonesia are having difficulty controlling Covid-19 as both countries are relatively weak in institutionalizing strict social incarceration practices.

"For a long time, the Philippines was very strict in controlling but eventually, they began to loosen some social imprisonment measures there.

"Meanwhile, Indonesia has never really started a strict social imprisonment," he said.

Meanwhile, China, Vietnam, Taiwan and New Zealand are currently witnessing economic expansion due to the effective management of the Covid-19 pandemic.

“There are three very important factors that help to see the differences across the Asia Pacific region. One is the extent to which a country manages the Covid-19 pandemic; the second is the relationship of countries with respect to world trade patterns and supply chains and the third is the fiscal response, which is becoming very important in the region, ”Cochrane explained.

Overall, Asia Pacific is the strongest region globally and moving forward, leading the way in economic recovery from the Covid-19 pandemic.