August 15, 2020 House of Trust

MIER: 2.4 million Job Losses under Worst Case Scenario

As of March 30th 2020, Malaysia recorded 156 new Covid-19 cases, bringing the total number to 2,626. The good news is that 91 people have recovered in the span of 24 hours, with the total recoveries at 479 cases (18.2 % of total cases).

However, 3 new Covid-19 related fatalities were recorded, bringing the death toll in Malaysia to 37 (1.4% of the total cases).

Source: Covid Visualizer

Recently, Malaysian Institute of Economic Research (MIER) published ‘The Economic Impacts of COVID-19‘.

MIER, through their Health Economics Division project that the pandemic in Malaysia will peak at Day 26, 12th of April 2020, with 8,957 cumulative cases (5,070 active cases).

Source: MIER

In addition, the report revealed several interesting findings through the Computable General Equilibrium (CGE) model. Under the Worst-case scenario, in which there is a reduction in industrial outputs and trade by 70% during MCO in quarter 1 and 2 and outputs and trade rebound by 96% and 98% to baseline level in quarter 3 and 4, respectively, the macroeconomic impacts in 2020 include:

  • Real GDP contracted by 6.9% relative to baseline.
  • Projected real GDP growth (YoY) = -2.9%.
  • Value of real GDP losses (relative to projected 2020 baseline) = RM102 billion.
  • Job losses; 2.4 million (out of 16 million employed labor in 2019)
  • Household income losses = RM95 billion (-12% relative to projected baseline in 2020).
  • Private consumption fell by 11%, due to income losses.
  • Overall consumer prices fell by 4.4%.

On the other hand, under the Best Case Scenario (reduction in industrial outputs and trade by 40% during MCO in quarter 1 and 2; outputs and trade fully rebound to baseline level in quarter 3 and increases by 2% in quarter 4), the economic projection is as follows:

  • Real GDP contracted by 2.61% relative to baseline.
  • Projected real GDP growth (YoY) = 1.57%.
  • Value of real GDP losses (relative to projected 2020 baseline) = RM38 billion (RM73 billion in nominal term).
  • Job losses; 951,000 (out of 16 million employed labor in 2019, presumably mainly non-salaried jobs)
  • Household income losses = RM41 billion (-5.2% relative to projected baseline in 2020).
  • Private consumption fell by 4.9%, due to income losses.
  • Overall consumer prices fell by 2.05%.

**For MIER Press Statement, refer to the attachment below:

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