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Program Strategik Memperkasa Rakyat dan Ekonomi Tambahan (PEMERKASA+): The Lockdown Tempers the GDP Outlook

The critical stage in the race to end deadly COVID-19 pandemic with exponential rise in infections and deaths as well as overloaded healthcare system, has forced on the Government to implement a three-phase nationwide lockdown that will start with a "total lockdown" from 1-14 June 2021; followed by four weeks under the second phase of lockdown; and the third phase, which will be similar to the Movement Control Order (MCO) restrictions presently in force.
The Government introduced a RM40 billion Program Strategik Memperkasa Rakyat dan Ekonomi Tambahan (PEMERKASA+), the 8th economic stimulus and recovery package rolled out since 2020. It contains twelve initiatives to strengthen the capacity of public healthcare system; ease financial burden of households and individuals; and ensure the business sustainability of SMEs and micro business.
The RM5.0 billion fiscal injection will be funded either through savings on expenditure by reprioritising, borrowings as well as increasing revenue from dividends derived from government-linked companies and statutory bodies.
It is likely that the Federal Government’s overall fiscal deficit target may be tweaked higher from the current estimates of 6.0% of GDP in 2021 (2020: -6.2% of GDP). Similarly, the statutory debt level could be increased above the present estimated 58.5% of GDP by end-2021 (Debt ceiling is set at 60% of GDP).