KUALA LUMPUR: The government has decided to defer the introduction of the 12th Malaysia Plan, which is scheduled to be tabled at Parliament in August.
Minister in the Prime Minister's Department in charge of economy Datuk Seri Mustapa Mohamed said this was made due to unprecedented change in economic landscape and decline in economic activities caused by the Covid-19 pandemic.
"We decided to postpone the 12th Malaysia Plan presentation because things were quite fluid and more unpredictable.
"For that reason, we have also decided to re-engage with various ministries and stakeholders," Mustapa said at a Facebook live on the World Bank Group's latest Malaysia Economic Monitor entitled 'Surviving the Storm' here today.
He said the 12th Malaysia Plan's preparation had been advanced.
The government was almost done with the plan, he said, adding that it would have been finalised by June or July this year.
However, he said the pandemic had emerged and the government had implemented the Movement Control Order (MCO) on March 18.
"During the MCO, the economic landscape has changed with the emergence of gig economy (food deliveries and people buy groceries online). Many people were out of work and people were fearful to go out and health became a major issue. But we managed to deal with that effectively," he said.
Mustapa expects the local economy to be quite "steep" in the second quarter. The country's gross domestic product (GDP) grew 0.7 per cent in the first quarter.
"Hence, we decided to revisit some of the strategies in the 12th Malaysia Plan. There has been disruptions in some sectors such as the tourism sector was the most affected. Any strategies for the Plan must to be synchronised with the current development.
"It will not make sense if the strategies are out of sync with what is happening around us. The economic situation has also changed radically, the worst ever recession in eight years," he said.
Mustapa said Malaysia's unemployment April rate was 5.0 per cent and the number was expected to be higher than 5.0 per cent in May.
The Malaysian Institute of Economic Research had projected that the local unemployment to reach 2.4 million this year, he added.
This is one of the changes the government will need to take into account when preparing for the plan.
On the fiscal front, Mustapa said the budget for 2020 presented last year had a forecast of just over 3.0 per cent deficit to GDP ratio.
However, the deficit is expected to hover over 6.0 per cent.
"There is a big change and it means a lot difference from 3.2 per cent deficit to 6.0 per cent. This is equally important," he said.
Mustapa said the government must put in place strategies for the next five to 10 years, on top of the Shared Prosperity Vision which was unveiled last October.
He said the other relevant important issue in the 12th Malaysia Plan would be the government's spending.
"For the 11th Malaysia Plan, the government had spent RM260 billion. Hence, we need to know fairly sure, how much money will have to spend on the 12th Malaysia Plan," he said.
The 11th Malaysia Plan (2016-2020), was the final five-year blueprint in the country's journey towards realising Vision 2020.
The plan reaffirmed the government's commitment to a vision of growth, anchored on the prosperity and wellbeing of the rakyat.
The 11th Plan is premised on a progressive and united Malaysians that share a common commitment towards building a better Malaysia for all Malaysians.