ISKANDAR PUTERI: Johor's gross domestic product (GDP) is expected to shrink by between 3.5 per cent and 5.5 per cent this year.
Menteri Besar Datuk Hasni Mohammad said although second quarter economic data for the state has yet to be announced, several observations can already be made.
"Malaysia's GDP contracted 17.1 per cent in the second quarter of the year due to the effect of the Covid-19 pandemic. Johor's (second quarter) GDP contraction would probably be greater than that.
"This is because Johor started 2020 in less than a vibrant situation after recording a GDP (growth) of 2.7 per cent in 2019, which is the lowest in 10 years due to slower momentum in the service, manufacturing and construction sectors.
"Based on the latest trends and the factors mentioned, Johor's GDP for 2020 would (likely) contact by between 3.5 per cent and 5.5 per cent. Normally, Johor's GDP would contract lower than the national level due to the state's economic dynamic of dependence with Singapore," said Hasni.
He was responding to questions from Raven Kumar (Tenggaroh-BN), Tan Chen Choon (Jementah-PH) and Andrew Chen Kah (Stulang-PH) at the State Assembly here, today.
The Menteri Besar stressed, however, that Johor's economy will continue to be competitive.
"As one of the most developed states in Malaysia, Johor's economy is supported by diverse service, manufacturing, construction and agriculture sub-sectors, as well as strong fiscal management and low debt.
"In term of debt, Johor recorded the lowest gross debt to GDP ratio behind Penang and Selangor. With these strong foundations, Johor should be able to overcome any economic challenge.
"In general, Johor will probably experience a V-shaped recovery post-Covid-19 pandemic," said Hasni.
He said the state government has also taken several fiscal measures to ensure the state's financial status remains stable, strong and competitive.
"First, the state government will undertake a review of the state's Budget 2020 by relooking at and restructuring department expenses state-wide. This will include reviewing and realigning department allocations so that there will be a focus on improving the economic and social competitiveness of the people of Johor.
"The review will also take into account the RM174.46 million allocated for the 54 initiatives under the Ihsan Johor Economic Stimulus Package Series 1 and 2," said Hasni.
He said other measures taken include focusing on improving revenue collection and expenditure efficiency to strengthen the state's financial position.
"We will also introduce policies that are suitable for all economic and social sectors that would enable the state to remain competitive in the future," said Hasni.
He also gave assurances that the state government is committed to ensuring the success of all the agendas that have been planned.
"They will succeed with the support of all civil servants and the cooperation of all the people of Johor."