The Impact of the COVID-19 Pandemic on Malaysia’s Economy

The COVID-19 global infection has been recognised as an alarming pandemic threat in Malaysia since the second week of March 2020. The government was forced to hastily implement the Movement Control Order (MCO) to prevent the growing spread and terrifying health threat of COVID-19. The necessary lockdown measures drastically slowed down the economic growth of the country and caused an adverse impact on many industries, businesses, and households. Multiple stimulus packages have since been announced by the government towards securing and recovering the economy from the resultant effects of the pandemic. The stimulus packages were intended to provide coverage for both the welfare of consumers (demand side) as well as the producers (supply side). The objectives of this chapter are as follows: (1) To describe and discuss the impacts of the devastating COVID-19 pandemic based on selected macroeconomic indicators. (2) To review the existing economic policy on combating and mitigating the effects of the pandemic. (3) To propose some significant improvements and necessary modifications on the general economic policy. We conclude that the severe adverse impact of the pandemic on the macroeconomy is very significant and extremely “game-changing”. However, it shows some improvement with the implementation of the various stimulus packages throughout the year of 2020. We suggest that the government focuses on fine-tuning and strategising the economic policy that aims to encourage a sustainable growth in domestic spending, and consumer and producer confidence in its efforts of stimulating the economy