Public Investment Bank Bhd (PIVB) has maintained its forecast for Gross Domestic Product (GDP) growth of 2021 by 6.2% despite the further enforcement of the Movement Control Order (PKP 2.0).
Bernama reported quoting the investment bank as saying that the economic impact of PKP 2.0 has been greatly addressed following the government's fiscal injection of RM6 billion.
According to PIVB through its note today, the RM6 billion fiscal injection will produce a multiplier effect of RM30 billion on the economy compared to the economic loss of RM22.2 billion over 37 days of PKP 2.0 based on the economic loss of RM600 million a day.
"In fact, the effect of the fiscal injection may be higher if the consumption tendency (MPC) jumps to 0.9 times (10 times the multiplier effect). This may happen if you look at the current high unemployment rate (November 2020: 4.8%) and is able to encourage large urges to spend, especially for essential goods and services, "he said.
Assuming a multiplier effect from the MPC five times, PIVB said, PKP 2.0 could be extended for up to 50 days without adversely affecting the economy, although the economy could recover higher with full opening rather than partial closure of operations.
"This positive prognosis supports our GDP outlook which remains unchanged at 6.2 per cent for 2021, which is consistent with the outlook for a stable economic outlook by the Ministry of Finance," explained PIVB.
Yesterday, Senior Minister (Security Cluster) Datuk Seri Ismail Sabri Yaakob, announced that PKP 2.0 which is being implemented nationwide except Sarawak, which is scheduled to end on Feb 4, will be extended for another two weeks until February 18.
