Economic liberalisation via trade may reduce national debt, says economist

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KUALA LUMPUR – The government ought to consider economic liberalisation through various initiatives, especially from the aspect of international trade, to give more injections of a long-lasting impact on the economy, an economist said.

Malaysian Rating Corporation Bhd (Marc) chief economist Firdaos Rosli said the government's initiatives were now more focused on private sector demand and not supply as private sector demand accounted for about 60% of the country's gross domestic product (GDP) at present.

“Supply is a bit difficult (to implement) as the impact is not immediate and if the government opens the economy now, the government will not see the impact immediately in that year, maybe the impact can be seen in the second or third years and so forth.

“But if the government focuses on private sector demand, the impact is immediate. For example, the government gives a Keluarga Malaysia assistance of RM2,000 to a person, he will take the money and spend it.

“But for supply, it is a little slow as a company or FDI (foreign direct investment) has to set up factories, employs workers, this will take time,” he said on Bernama TV’s “Ruang Bicara” programme entitled “Understanding Budget 2022” yesterday.

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