Malaysia readies stimulus package in response to coronavirus outbreak

Malaysia will soon unveil a stimulus package for aviation, retailing and tourism following the coronavirus outbreak, the economic affairs ministry said on Tuesday (Feb 11), after Prime Minister Mahathir Mohamad chaired a meeting on the impact of the disease.

The economy of the Southeast Asian nation is closely linked with its biggest trade partner China, where the epidemic has killed more than 1,000 people, infected 42,000 and disrupted economic activity. "

Among the focus areas will be to...introduce initiatives to encourage domestic spending and tourism to generate growth through higher local demand," the ministry said in a statement, identifying sectors such as aviation, retail and tourism. Another aspect would be to help industry tackle issues of cash flow in business operations, it added. "

Announcements on this stimulus package will be made in the near future," the ministry said, without giving a timeframe. Analysts expect Malaysian airlines such as AirAsia Group to see a slowdown in business as the epidemic hits regional travel and tourism.

On Monday, Mahathir said the government expected 2020 growth of 4.8 per cent as previously forecast, "despite challenging times".On Wednesday, the central bank will release figures for fourth-quarter growth, which is expected to have slowed to its weakest since mid-2016 on feeble private consumption and external demand.

---Reuters, Kuala Lumpur