Malaysia’s unemployment rate could hit six per cent or even higher this year, worse than during the 1997 Asian financial crisis and 2008 Great Recession when unemployment rose to 3.2 per cent and 3.7 per cent respectively, said AmBank Group Research.
The recent labour market data according to the research house suggested the health of the job market is far more devastating after unemployment in April climbed to five per cent, the highest since 1990 from 3.9 per cent in March.
Its chief economist and head of research Dr Anthony Dass in a note today said closures of most business operations during the movement control order (MCO) have slashed jobs, making it even harder for job seekers to find employment.
As a result, the number of unemployed persons jumped by 48.8 per cent year-on-year (yoy) to 778,800 persons in April while the total number of unemployed for the first four months of the year amounted to 2.4 million people.
They are largely traders/small traders (farmer’s market/night markets/ catering/ stalls/ freelancers) smallholders, tour operators and others.
“These groups were exposed to the risk of job and income losses following the MCO. The survey also showed the MCO affected 4.87 million employed persons who were not working in April 2020.
“This group of people is not categorised as unemployed as they have jobs to return to,” he said.
Dass said the upward pressure on the number of job losses remains and much will depend on the ability of the businesses to weather the current unprecedented challenging time.
He said the risk of companies going under remains high, apart from restructuring and engaging in mergers and acquisitions (M&A).
“It also remained unclear how the labour market will be when the wage subsidy programme (WSP), which started in April ends as it has provided financial relief to employers facing revenue constraints and has saved 2.2 million jobs.
“Although government incentives aimed at retaining employees and the gradual reactivation of economy following the conditional MCO and recovery MCO in May and June could ease some burden, it may not take the weight off instantly considering an estimated 500,000 new entrants to the labour market this year,” he added. — BERNAMA