06 November 2020
As Malaysia navigates the impact of COVID-19, we are pleased to see the government’s firm commitment on an expansionary stimulus for 2021, continuing the fiscal injections made in 2020. The government spending today is necessary given the unprecedented environment.
We welcome that Budget 2021 continues to comprehensively build on Malaysia’s focus on reducing income inequality, healthcare spending, and targeted assistance to businesses. Proactive measures by the government include deepening engagements for job creation, training and reskilling, investing further in broadband connectivity and accelerating development in e-commerce. These long-term investments will reduce the digital divide at both levels of human capital and technological infrastructure.
The government’s focus on the Rakyat is commendable and timely where increased healthcare spending is needed to address the COVID-19 challenge through multi-lateral partnerships. This is especially relevant given the recent resurgence in COVID-19 cases.
CIMB welcomes our role as enablers of the recovery, by participating in the expanded Targeted Loan Assistance Programme. It is optimal that assistance to borrowers is done in a targeted manner to ensure funds are specifically channelled to individuals and companies in need, including those affected SMEs, B40s and M40s. This is more effective as those who can afford resuming their payment should do so to avoid incurring higher costs and to ensure the banking system remains healthy, backed by good asset quality to support additional lending activities.
The effective channelling of financial resources to the consumer has also been facilitated by several Budget initiatives. For example, EPF will allow the monthly withdrawal of RM500 from Account 1, with medical related tax relief raised. There will also be direct cash transfers to frontline workers and single individuals. Collectively, these would provide a multiplier effect in the Malaysian economy, bolstering its recovery.
CIMB, alongside other strategic GLCs and GLICs in Malaysia, will continue to stand united in supporting the national recovery effort, through further investments and job creation. In summary, we and the industry welcome Budget 2021 as a strong and impactful one, where the government and private sector work as partners to ensure the economy remains resilient and productive, able to assist the Rakyat navigate this challenging time.