Getting confidence back is key

WHEN Malaysia announced its first quarter GDP number of a growth of 0.7%, there was a temporary sigh of relief.

Avoiding a negative number for the quarter meant the country will stave off a recession for now but it was no more than cosmetics on the ongoing problems caused by the Covid-19 pandemic globally.

The second quarter will be bad. A contraction if forecast and going by what we are seeing now locally and globally happens, then there is very little chance of avoiding a recession altogether.

But the third quarter will be key in terms of signals of a rebound. Malaysia has a sliver of a chance of avoiding a recession if third quarter numbers hold off a contraction when all of the containment efforts by the government will basically kick in.

Right now there is little confidence among consumers for that to take place.

People are generally reluctant to spend and if they are willing too, they have to put up with long queues and registration before entering premises to buy goods.

Using technology should be the focus here as that will eliminate the hassle of physically filling up a form before making any purchase or even browsing through a shop.

The government is aware of the loss of confidence and that is equally as important as fiscally pumping in cash into the system.

If people do not have the confidence to start buying then the economy, which is basically 60% based on consumption, will take a hit.

What needs to happen is to make Malaysians feel secure enough to venture out and start buying. The efforts with contact tracing should be seamless and people should feel that. Shopping or buying experience, even after adjusting for the new normal, should reflect as much as possible past encounters when making purchases.

Then there is the export market. Until that recovers, Malaysia will have a hard time addressing the economic woes. That too goes with business confidence to start investing in creating opportunities and jobs by companies.

Restarting the economy is just start towards normalcy for the country.

There is always the threat of a rise of infections again and Malaysians have to be extra vigilant to ensure that the troubles that landed us in this predicament are well contained in order to rebuild the economy back to a decent level of effectiveness.