‘Lower unemployment rate a good sign’

BATU KAWAN: It is a good sign for the economy that the unemployment rate has declined to 4.9% in June from a record high of 5.3% in May.

However, Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz said the nation’s gross domestic product (GDP) in the third quarter would still largely depend on the country’s handling of the Covid-19 pandemic.

“There is a good sign as when the economy opened up on May 4, the employment rate went up.

“But this does not mean that we can be complacent because the third quarter will depend on how well we handle the pandemic.

“If we can sustain growth, the third quarter should be better than the second quarter.

“The fourth quarter will depend on how the global economy has improved because we are a very open economy and we are very much part of the supply chain,” he told reporters after a visit to ViTrox Technologies

Sdn Bhd in Batu Kawan yesterday.

Tengku Zafrul said if the world economy opened up and improved, Malaysia would be in a good position for a rebound in 2021.

“We are hoping to get V-shaped economic growth but this is subject to how Malaysia and the world addresses the health crisis.

“I am very optimistic, seeing the facts and figures, especially in June.

“We need to be focused on adhering to the standard operating procedure (SOP) when it comes to health,” he said.

Tengku Zafrul said the country’s economic growth for the first quarter was 0.7%, while the second quarter would be announced by Bank Negara on Aug 14.

“The second quarter was challenging as we underwent the movement control order (MCO) during that period. We predicted a decrease in GDP for the second quarter. We are not alone as this is a global pandemic.

“More than 150 countries in the world will experience economic contraction in 2020,” he said.

On another matter, Tengku Zafrul said human capital investment was vital, especially in the area of research and development.

“People at the end of the day will drive the economy of the future. The issues raised by industries that I’ve visited here are divided into two categories.

“The immediate concern is that we need to assist the industries affected by Covid-19.

“The other one is the mid-term plan, which is really something that we would like to address in Budget 2021 to be announced in Parliament on Nov 6.

“We are looking at some of the initiatives that we already have to make them better.

“What I have heard from the industries is that we should use some of the challenges faced before and during the crisis as a lesson.

“We can learn and rectify some of the structural challenges faced even before Covid-19. Let’s not waste this crisis and fix some of the longer-term structure issues,” he said.