Unemployment rate down to 4.5 pct by year-end, foresees UOB Malaysia

Unemployment rate down to 4.5 pct by year-end, foresees UOB Malaysia

KUALA LUMPUR: The unemployment rate in Malaysia is expected to ease further to 4.5 per cent by year-end, according to United Overseas Bank (M) Bhd.

Its senior economist Julia Goh said Malaysia’s labour market continued to improve with the unemployment rate falling for the second straight month to 4.7 per cent in July from 4.9 per cent in June and the peak of 5.3 per cent in May.

She said the total labour force increased by 55,000 persons (month-on-month) to 15.82 million people in July as a result of the reopening of more economic sectors under the Recovery Movement Control Order including tourism, education, entertainment and recreational activities.

“The entrance of new graduates and workers returning to seek employment as economic conditions continue to improve should see a higher labour force participation rate in the coming months,” she said in a note today.

She said most economic sectors posted an increase in hiring in July, led by the services sector particularly accommodation; food and beverages; and transport and storage activities.

“The increase in employment in the manufacturing sector was led by electrical and electronics, metal related, printing, plastic, motor vehicles, and rubber products sub-industries.

“Despite recent labour market indicators showing signs of improvement, we expect hurdles ahead as some of the relief measures, namely the Wage Subsidy Programme and six-month blanket loan moratorium expire end of this month,” she said.

The loan moratorium and repayment assistance thereafter would be extended on a targeted basis to those still affected by COVID-19.

“This will help pace the transition from broad temporary relief measures and avert another wave of business closures and layoffs, Goh said.-Bernama