KUALA LUMPUR: Bank Islam Malaysia Bhd believes Budget 2021, which will be tabled on Nov 6, will be formulated to take into account the current economic situation that is still fragile even though it has shown encouraging signs of recovery.
CEO Mohd Muazzam Mohamad said the government’s recent move to increase its debt ceiling from 55% of the gross domestic product (GDP) to 60%, would definitely give it some flexibility to manoeuvre an expanded fiscal policy to further boost the economic recovery.
“With that, the steps to be introduced is hoped to be able to help reduce the burden of businesses and Malaysians in general, particularly those in the Bottom 40% income group (B40) and the Middle 40% group (M40).
“Besides that, emphasis on capacity building specifically on upskilling exercise as well to create job opportunities should also be the main focus of the upcoming Budget,” he told Bernama.
Bank Islam has projected the country’s GDP for 2021 to grow at 6.2% compared with an expected contraction of 4.0% this year due to the impact of the Covid-19 pandemic.
On the back of this scenario, Mohd Muazzam said for Budget 2021, the bank expected the government to consider increasing the expenditure to stimulate the growth of economic sectors and people who are still affected by the pandemic.
“Focus must be given to minimise the effects of the pandemic on Small and Medium Enterprises (SME) and individuals that have lost their source of income,” he said.
Citing the Statistics Department report that the country’s unemployment rate in August 2020 was at 4.7% or 741,600 individuals who are not working, he said it showed that the country is not operating at full employment.
On that note, he opined the Wage Subsidy Programme must be continued to further incentivise the employers in the SME sector to maintain their workers.
Apart from that, Bank Islam also wished to see Budget 2021 prioritising an increase in entrepreneurial training and explore the potential of agrofood sector.
“The retraining programme for entrepreneurs must be widened to encourage the people affected by Covid-19 to join the business segment.
“One of the potential sectors that encourage entrepreneurial activity is the agrofood sector. This is because the country depends a lot on imported produce to fulfil domestic demand,” he said.
In 2019, the total import of agrofood amounted to RM51.5 billion while exports were about RM24.1 billion, showing a trade deficit of RM17.4 billion for this sector, he said.
In another development, he said Bank Islam would like to see more efforts to integrate the Islamic economic system into the mainstream economy to further drive economic growth.
Bank Islam wishes to see Budget 2021 prioritise entrepreneurial training and explore the potential of agrofood sector. Picture for representation purposes only. – REUTERSPIX
Source: The Sun Daily
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