KUALA LUMPUR: The multiplier effects of the RM150 billion Pemulih economic package will uplift Malaysia's gross domestic product (GDP) by two percentage points, Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz said.
Tengku Zafrul, however, said the government would revise downward the GDP forecast from the earlier projection of between six and 7.5 per cent.
Last week, World Bank cut its GDP growth projection for Malaysia for the second time to 4.5 per cent in 2021 from six per cent estimated in March and 6.7 per cent in December 2020.
This was after taking into account a flare-up in Covid-19 infections and slower-than-expected vaccine rollout.
"The Finance Ministry and Bank Negara Malaysia are studying the cost of having the current Movement Control Order (MCO) under Phase 1, Phase 2, Phase 3 and Phase 4 and should it mitigate the impact to GDP with the introduction of Pemulih.
"Yes, we expect the GDP forecast to be revised downward given the current MCO. But the good thing is, as we move towards Phase 2, 3 and 4, more sectors will be reopened and should affect the economy slowly towards the third and fourth quarters of the year," he told reporters at a virtual briefing on Pemulih yesterday.
Tengku Zafrul said the official announcement on the new GDP projection would be made in mid-August.
The national fiscal deficit was expected to rise given the potentially lower GDP projection than what was forecast earlier, he added.
Tengku Zafrul said the RM10 billion direct fiscal injection in the RM150 billion Pemulih stimulus would be generated from a mix of three means.
They are government revenue from increased dividend of some statutory bodies and government-linked companies (GLCs), optimising government's operating and development expenditures, and additional domestic borrowings.
He said the government would still be within the debt ceiling of 60 per cent, despite the implementation of Pemulih and seven other economic stimulus packages previously.
Parliament approved the government's plan to raise its debt ceiling to 60 per cent from 55 per cent in August last year, the first time in more than a decade.
"Whether we will cross the 60 per cent debt to gross domestic product ceiling, we will be studying depending on the forecast of the GDP (this year). We will monitor this and if there is the need, we will go to Parliament we will definitely get this increase to help the people. But I don't think we need to for now we are still within the 60 per cent," he added.
On the latest loan moratorium under Pemulih, Tengku Zafrul said it would not be interest free.
He, however, said banks would waive compounded interest and penalty charges for borrowers who take up the moratorium.
He said the moratorium was put in place to assist borrowers in deferring their repayment and that the method of repayment as well as interest charges was "between the borrowers and the bank".
"The moratorium that we announced (in Pemulih) is the same as the moratorium we announced before. It is not interest free.
"Let's focus on what is important. The important thing is we have managed to get the banks to give the moratorium to everyone, regardless whether they are affected or not. That moratorium hopefully will help the cashflow of the rakyat," he added.
Under the RM150 billion stimulus, a six-month bank loan moratorium will be granted to all individual borrowers and micro-entrepreneurs to help them weather the economic effects of the Covid-19 pandemic.
Prime Minister Tan Sri Muhyiddin Yassin, in unveiling Pemulih yesterday, said the moratorium would be given to all individuals, regardless of their income bracket, and would be approved automatically after application.
Meanwhile, Tengku Zafrul said according to data provided by the Employees Provident Fund (EPF), 12.4 million members would be eligible to apply for i-Citra.
Out of that numbers, 8.7 million have sufficient savings to withdraw, while 3.7 million have less than RM5,000 as stipulated.
"This is a structural issue within the EPF and over the long term, we need to help address the gap where people now need to save up for their future. But today, we are facing a major crisis so we are doing what we can to assist the rakyat who are affected by the Covid-19 pandemic," he said.
Under the i-Citra initiative, all members below the age of 55 can withdraw up to RM5,000 subject to their total combined balance in both Accounts 1 and 2.
The approved withdrawal amount will be paid for up to five months, with a fixed monthly payment of RM1000 per month subject to savings balance and a minimum of RM50.