CYBERJAYA (Feb 17): Malaysia will be one of the first countries in the region to introduce an economic stimulus package to mitigate the economic effects of the Covid-19 virus outbreak, according to Finance Minister Lim Guan Eng.

Lim said this in response to criticisms that Malaysia may not be moving as fast as other countries across Asia in strengthening its economy with fiscal and monetary stimuli, as the coronavirus outbreak starts to negatively affect the already weak economy.

“There are those who say we are too fast, because it is still unclear what the true impact of the Covid-19 outbreak is. When we look at other countries, they are announcing an economic stimulus much later than Malaysia.

“Indeed, Malaysia is [going to be] among the earliest countries to announce an economic stimulus package,” he said at a press conference today.

Bloomberg today reported China, Hong Kong and Singapore have pledged extra fiscal stimulus to counter the economic hit from the coronavirus.

Hong Kong, already hit hard by months of protest turmoil, is suffering further under the viral outbreak, with its retail and tourism industry getting the brunt of the impact. As for Singapore, its Prime Minister Lee Hsien Loong has said a recession "is possible" for the island city-state, due to the outbreak.

Lim, meanwhile, updated that his ministry is engaging with industry players and evaluating proposals, which will be subject to the government's fiscal limitations.

“It is still a process where we are still engaging the members of the industry. We are getting a lot of inputs and a lot of submissions from all quarters. But let us evaluate, see what we can afford and what we cannot afford, and how we can assist the affected sectors.  

“And the prime minister himself will be making the announcement, which shows the emphasis and the priority placed by the government [on this issue] and that the government is taking urgent and immediate steps to address the situation,” Lim added.

The economic stimulus package will be announced next Thursday (Feb 27).

At the event earlier today, Bank Simpanan Nasional (BSN) announced a strategic collaboration with SME Bank Group and Malaysia Digital Economy Corp (MDEC) to launch the government’s digitalization initiative for small and medium enterprises (SMEs).

The ministry of finance previously announced during the tabling of Budget 2020 that it had allocated a special budget for the digitization of the Malaysian economy, with the SME segment also given priority.

Subsequently, the ministry appointed BSN as the lead of the strategic cooperation with SME Bank and MDEC to provide matching grants to SME entrepreneurs to enhance the use of digital applications in their business operations.

Under the strategic collaboration, a 50% matching grant of up to RM5,000 is provided for SMEs to subscribe to digital services. The matching grants amount to RM500 million over a period of five years, and are limited to the first 100,000 SMEs who apply to upgrade their systems each year.