Malaysia's gross domestic product rose 4.3% in 2019, slowing down from the 4.7% growth logged in 2018, and the coronavirus outbreak will put further pressure on the economy this year.
Kuala Lumpur is looking to launch a stimulus package to mitigate the economic impact of the epidemic. The economy of the Southeast Asian nation is closely linked with its biggest trade partner China, where the novel coronavirus 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.
The overall impact of the virus on the Malaysian economy will depend on the duration and spread of the outbreak as well as policy responses by authorities"
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.
At the weekend, Finance Minister Lim Guan Eng said his ministry will look at the duration and impact of the coronavirus outbreak in Malaysia, before deciding on the suitable quantum for the stimulus package.
"This (the stimulus package) cannot be done in a hurry, we need to look at the impact to ensure that those who are affected will get the help they need, and to do that, we need to get input from various parties," he was quoted as saying by the Star.
"Many economic analysts are saying that the outbreak would not last a long time, which is why we need to ensure that the package would assist those who need it to remain sustainable."
Bank Negara governor Nor Shamsiah Mohd Yunus said growth for the first quarter of 2020 would be hit by the Covid-19 virus outbreak. "The overall impact of the virus on the Malaysian economy will depend on the duration and spread of the outbreak as well as policy responses by authorities," said Nor Shamsiah.
For the October to December quarter, the economy grew 3.6% on the year, -- also the lowest point since the 2009 global financial crisis -- versus an average forecast of 4.2% by 13 economists in a Reuters poll and lower than the 4.9% and 4.4% registered in the second and third quarters of 2019.
Nor Shamsiah told reporters that weaker net exports of goods and services, as well as slower public consumption, resulted in the fourth quarter's sluggish growth.
In the meantime, Singapore and Malaysia have announced they will set up a joint working group to strengthen cooperation in tackling the spread of the coronavirus outbreak.