OECD Economic Surveys: Malaysia 2021
Like many other countries, Malaysia was hit hard by the COVID-19 pandemic starting in early 2020. Its past policy prudence has allowed Malaysia to react swiftly and boldly to the public health and economic crisis. Nevertheless, the crisis revealed the necessity of further reforms that Malaysia needs to pursue in order to achieve more inclusive and high growth after the pandemic. Vulnerable workers have been more affected during the pandemic and many firms have been urged to use digital tools, such as e-commerce and teleworking, for the first time. Going forward, strengthening social protection is of utmost important to improve the well-being of the Malaysian people, including self-employed workers, and prepare for the ageing society. Easing government regulations further is crucial to stimulate business dynamism and restore vigorous growth. Accelerating digitalisation will be key for Malaysian firms to become more productive in the post-pandemic era. Along with its further economic development, Malaysia needs to transform itself into a greener economy.
SPECIAL FEATURES: PRODUCT MARKET REGULATION; DIGITALISATION; TELEWORKING
Also available in: French
Key policy insights
The COVID-19 crisis has caused a deep economic contraction in Malaysia. A recovery is projected to unfold in the second half of 2021, thanks to government intervention to control the contagion, but mutations of the virus could jeopardise the return to growth. The pandemic has revealed acute policy issues that need to be addressed. Vulnerable groups were hit severely, despite social protection support from the government, and the SME sector has more suffered from the economic downturn than large firms. This chapter discusses the macroeconomic and social impacts of the pandemic and policy responses that will be required to achieve a sustainable and inclusive recovery and progress towards high-income status, including a strategy to decarbonise economic growth.
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