KUALA LUMPUR (Reuters) – Malaysia may extend its travel curbs beyond April 28 but with more sectors open for business, its second-most senior minister told Reuters on Friday as the government tries to balance health and economic requirements during the COVID-19 crisis.
A partial lockdown since March 18 has badly hurt Southeast Asia’s third biggest economy, which until the start of this week had the highest number of reported coronavirus infections in the region. On Friday, it recorded the lowest number of daily increases in new cases since the curbs were imposed.
The government, which took office only last month after the previous ruling coalition imploded, has already announced a 260 billion ringgit ($59.56 billion) stimulus package to cushion the impact of the pandemic on the economy and its people.
“Based on our discussions, the movement control order may still be in place but we may have to see what are the areas that we can relax and open up, to strike a balance between the requirements of the health of the people and also the economic priorities,” Mohamed Azmin Ali, the minister of international trade and industry and the government’s designated second-in-command, said in a telephone interview.
Malaysia on Friday reported 69 new coronavirus cases, taking the total to 5,251 patients, 86 of whom have died.
Its central bank forecast this month that the economy could shrink by as much as 2% or grow 0.5%, in what would be its worst economic performance in more than a decade. The economy grew 4.3% last year.
Azmin, 55, said much would depend on the health of Malaysia’s major trading partners, notably China and the United States.
Azmin and Prime Minister Muhyiddin Yassin were both senior ministers in the previous multi-ethnic government that broke apart in February amid a power struggle. The two leaders, from the majority Malay community, played a key role in the formation of a new coalition, allying with a corruption-ridden party that was defeated in the 2018 general election.
Azmin said Malaysia was trying to find ways to fund the stimulus packages by diverting money meant for ministries such as tourism, but a massive fall in oil prices had complicated matters.
Driven by output from state company Petronas [PETRO.UL], Malaysia is the world’s third biggest exporter of liquefied natural gas. But Malaysia has agreed with OPEC and allies to reduce energy output in a bid to shore up prices.
The government has treated Petronas as a cash cow at times, but Azmin said it won’t be easy for the company now to make a special dividend to its sole owner. The government, however, was still discussing the matter.
Turning to the country’s troubled airlines, Azmin said merging money-losing state carrier Malaysia Airlines Bhd (MAB) with budget airline AirAsia Group Bhd is one of the options to “save” them as the COVID-19 crisis batters the industry.
Azmin said the government had capacity to fund its stimulus package, but if an additional package was needed the finance ministry would decide whether to issue bonds. He said it was “very difficult” for the government to overly worry about a larger fiscal deficit when people were suffering.
Last month, S&P Global Ratings affirmed its ‘A-‘ long-term and ‘A-2’ short-term foreign currency sovereign credit ratings on Malaysia, and said the outlook on the long-term rating remained stable.
(Reporting by Krishna N. Das; Editing by Simon Cameron-Moore)