Image credit: Focus Malaysia
KUALA LUMPUR: Hong Leong Bank Bhd (HLB) is hopeful that the government would ensure the economic recovery momentum is maintained with an expansionary fiscal policy in the upcoming 2021 Budget.
Group managing director and chief executive officer Domenic Fuda said priorities should be given on key initiatives that will have a multiplier effect on the country's economy.
"Initiatives aimed at helping small-medium enterprises' (SMEs) recovery from the aftershock of the Covid-19 pandemic would help the recovery.
"SMEs constitute 98.5 per cent of all businesses in Malaysia and the health and wealth of our nation grows in tandem with how well the SME community thrives," he told the New Straits Times recently.
Fuda said SMEs fuel economic growth, socio-economic development and employ a significant number of people.
"Hence, targeted SME programmes will not only help alleviate financial pressures but also create a conducive environment for digital and technological adoption and new investments to lay a strong foundation for business sustainability and growth," he said.
Meanwhile, he said the recovery in the construction sector will be a key lever for the economy to rebound with spillovers to the building materials and its related manufacturing sectors.
Some measures to stimulate the construction sector include tax reliefs to the property sector be it in Real Property Gains Tax (RPGT), lower or exemption in stamp duties, or bringing forward infrastructure projects.
"These will provide a lift not only to the construction sector but also to wider economic activities," he said.
On the household and consumer perspective, he said measures to boost consumption would also contribute to Malaysia economic recovery, citing that private consumption contributes more than half of Malaysia's gross domestic product (GDP).
"As countries review the supply chain disruptions emanating from the pandemic as a result of trade tensions between the world's key economies, policies that would enhance Malaysia's ability to attract foreign direct investments would help to cement the country's position as a key manufacturing and distribution hub," he added.
Source: https://www.nst.com.my/business/2020/10/636810/economic-recovery-momentum-and-expansionary-policy-should-be-continued-hlb