Macro Analysis /
Malaysia

MY : Economic -Stimulus #7: Papering over MCO 2.0 cracks

    CGS-CIMB
    18 January 2021
    Published byCGS-CIMB

    Prime Minister Muhyiddin Yassin unveiled the RM15bn PERMAI stimulus package, of which RM2bn is estimated to be a direct fiscal injection. Key measures include a Wage Subsidy Scheme 3.0 (RM1bn), SME grants (RM650m), and additional financial assistance (RM140m). Minimal impact to the budget deficit target of 5.4% of GDP in 2021. Following timely stimulus, BNM may take a wait-and-see approach and retain the OPR at 20 Jan meeting, but we do not rule out further rate cuts in 1H21.