He said that despite the reopening of the nation’s borders on April 1, Malaysia’s growth prospect was expected to soften due to the uncertainties and economic implications of the Russia-Ukraine war.
“For this reason, the government should heed the requests of individuals and the business community for an extension of the interest rate waiver and bank loan moratorium that ended on March 31,” he said in a statement today.
According to Lim, the World Bank last week lowered its Malaysian gross domestic product growth forecast for 2022 to 5.5% from 5.8% previously, which was on the lower end of the government’s forecast of between 5.5% and 6.5%.
He said the economic implications revolved around lower job prospects with better pay and a higher cost of living, as well as rising business costs.
The “intolerable financial pressure” would be exacerbated by supply shortages and disruptions with the continued war in Ukraine.
Lim said that industries, especially small- and medium-sized enterprises (SMEs), were still trying to recover from the “failed economic policies”, pandemic lockdowns and management that had caused 4.3 million infections and more than 35,300 deaths.
“Lower economic growth means lower revenue and reduced ability of both individuals and businesses to service their loans,” he said.
The former finance minister said the previous loan moratoriums had provided relief to the value of at least RM80 billion and benefited eight million people and companies.
As for the costs involved in extending the loan moratorium and interest rate waiver, he said, the banking industry could afford them after recording healthy pre-tax profits of RM41.5 billion in 2019, RM28.5 billion in 2020 and RM33.7 billion in 2021.
“Clearly, bearing the costs of the loan moratorium and the interest has not affected the profitability of banks.
“However, much-needed assistance and relief from the loan moratorium and interest rate waiver will help individuals and businesses, especially SMEs, to allow them to recover from Covid-19 and overcome the current economic recession,” he said.
Earlier this year, Lim had urged Prime Minister Ismail Sabri Yaakob to extend the bank loan moratorium and interest rate waiver for another six months before its expiry by the end of February 2022, citing concerns over rising inflation and the consumer price index.