KUALA LUMPUR – The unemployment rate is expected to fall this year to between 3.5% and 4.0% compared to 4.8% in December 2020, driven especially by the government’s initiatives under Budget 2021, said Public Investment Bank.
This would be further pushed by the higher-than-usual increase in total labour force, it said in a research note yesterday.
“The unemployment rate could be slightly lower, however, if not for the slower-than-expected increase in total labour force which reached 15.9 million – an addition of only 101,000 for the year, compared to 338,000 on average for the last three years (2017-2019),” it said.
“This year may see a larger-than-usual increase in the total labour force by 575,000 to 16.5 million, one of the driving factors that will push the unemployment rate lower in 2021.”
According to the Statistics Department, Malaysia’s unemployment rate rose to 4.5% last year, the highest rate recorded since 1993.
The investment bank said other important drivers would come from the public-private initiatives to create 160,000 new jobs this year which would be achieved, among others, through skill enhancement.
It noted that this was part of the government’s initiative under Budget 2021 to create 500,000 new jobs, including the creation of 50,000 contract job opportunities within the public sector and government-linked companies.
“The government is committed to spending RM7 billion through initiatives like skills development, hiring and retraining programme which will be key to reach its job creation goal for the year.
“Though inspiring, the government’s MyDIGITAL initiatives to create 500,000 new jobs by 2025 may not create much employment opportunities this year as a significant portion of the government’s budget will go toward Covid-19 related expenditure,” it added.
On the risks to its projection of lower unemployment, Public Investment Bank said a slower-than-expected roll-out of Budget 2021 initiatives might affect the new job creation target. – Bernama, February 24, 2021
