PETALING JAYA: The Pemulih and previous stimulus packages are expected to churn out more economic activities in the second half of the year.

       TA Securities Research said this is especially so with the rising economic challenges as the extension of the first phase of the National Recovery Plan (NRP) is expected to lead to higher unemployment rate and more economic losses.

       This is expected to have a significant impact on private consumption and an approximate RM45bil loss in the second quarter, according to the research house.

       “The estimated RM1bil loss per day is expected to continue in July as the lockdown is extended until further notice, ” it said.

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       With the six packages that were announced last year, together with the Pemerkasa Plus and Pemulih plans, there are RM332.9bil to be utilised in from June to December this year.

       TA Securities pointed out there is also RM205bil to be spent out of the RM322.5bil allocation approved under Budget 2021.

       “Our quarterly projection shows that the Malaysian economy will post a moderate growth of 6.1% year-on-year (y-o-y) in the second quarter after a slight contraction in the first quarter.

       “A shaky and fragile outlook is envisaged for the third quarter depending on the transmission of recovery phases before improving further in the fourth quarter, ” the research house said.

       It added that Pemulih is expected to raise Malaysia’s fiscal deficit to -7% of the gross domestic product (GDP) this year, higher than the government’s target of -6.0% when the RM20bil Pemerkasa stimulus was announced.

       “Expect the government to reprioritise spending while we are benefiting from higher global crude oil price of above US$60 (RM249) per barrel as compared with US$42 (RM174) per barrel when Budget 2021 was drawn up, ” it said.

       AmBank Research said the additional measures should help keep the economic momentum, allowing the country to grow between 4% and 4.5%.

       It added that the current bond issuance of RM160bil is expected to increase to around RM160bil to RM165bil with the additional RM10bil fiscal injection.

       “The outlook post-July will depend on how well the pandemic is being managed, speed of the vaccination programme, how quickly the economy opens up and also on the standard operating procedures.

       “Any delay in opening up will present risk of big boys moving their operations to parent companies or elsewhere as uncertainty increases, ” it said, adding that it may also dampen the foreign investors’ appetite here.

       AmBank said exports are expected to recover in the fourth quarter of 2021, projected at 15% for the full year.

       CGS-CIMB Research said the fiscal outlays in Pemulih were modest at RM10bil or 0.7% of the GDP as the government tapped the public and private sectors to pitch in with non-fiscal support to tide the economy through the extended transition from the first to the fourth phase of the NRP.

       “While it temporarily mitigates the snowball effect from the phase one until the end of 2021, a clear roadmap to recovery for businesses affected and the labour force displaced by Covid-19 remains lacking, placing a ceiling on next year’s economic revival.

       “We retain our GDP growth forecasts at 4.4% in 2021 and 4.7% in 2022, ” the research house said.

       On the six-month loan moratorium, CGS-CIMB said it would not impact bank earnings significantly as they will be able to continue accruing interest from loans.

       It added that this, together with the new EPF withdrawals schemes, may not lead to as significant a jump in participation from retail investors compared with the first movement control order when a similar blanket loan moratorium was granted, due to political concerns and concerns over corporate earnings risks.