70,000 jobs can be created in Malaysia with 1% increase in GDP
The new jobs are expected to be created predominantly in new agricultural and industrial sectors, as well as in new services through digitalisation, the think tank said in its latest National Economic Outlook 2020-2021 update.
“The unemployment rates can be further reduced if the new graduates and school leavers entering the labour market this year are given short training for upskilling,” it said.
The country’s jobless rate rose by a marginal 0.1 percentage point month-on-month to 4.8% in November 2020, with 764,400 unemployed persons, MIER said.
It said one of the major elements in economic recovery is job creation, and it expects real recovery to only start from the second quarter this year. To achieve this, it said the government’s implementation of vaccination starting this month is crucial.
In terms of GDP, MIER is maintaining its projection of growth of between 5.2% and 6.7% this year, with this forecast taking into consideration MIER’s Crouching Tiger Initiative and the launch of the 12th Malaysia Plan.
The Crouching Tiger Initiative seeks to increase Malaysia’s productivity and wages with the increased use of technology to lift the country out of its middle-income status and transform it into a high-wage economy to become the fifth Asian tiger.
However, the pandemic remains as a major hurdle to the speed of economic recovery this year, following the current third wave of infections and the virus’ mutation into new variants, MIER said.
It said the flattening of the third wave of COVID-19 transmissions is expected to take a longer time – more than six to eleven months – compared to six months in the first wave. Also, the government’s Permai stimulus package will only have a “marginal to neutral” effect on the economy.
It said bringing down transmissions requires tighter and stricter lockdown and Standard Operating Procedure measures, including comprehensive testings, especially in factories and construction sites; extensive contact tracing; and an accelerated vaccination programme, according to Bernama.
“But a full economic lockdown should be avoided due to its potentially disastrous effect on the economic recovery that has just begun.
“For longer-term measures, public spending in infrastructure, health, education and housing; programmes to revive the small and medium enterprise sector affected by the pandemic; as well as new incentives to encourage investments in the private sector from domestic and foreign sources are the order of the day,” it added.