Dated 27th September 2021
The Government Must Reduce Interest Rate For Bank Loans In The Tourism And Hospitality Sector Adversely Affected By The COVID-19 Pandemic That Lost RM130 Billion In 2020.
The government must reduce interest rate for bank loans to the tourism and hospitality sector adversely affected by the COVID-19 pandemic that lost RM 130 billion in 2020. The Department of Statistics Malaysia (DOSM) reported that in 2020, the country’s tourism receipts recorded RM52.4 billion, which was a 71.2% drop from the RM182.1 billion recorded in 2019.
There is an urgent need to allow the tourism industry to be sustainable and survive. Despite the poor performance of the tourism industry throughout 2020, the industry still generated RM199.4 billion in gross value added of tourism industries (GVATI) by contributing 14.1% to the gross domestic product (GDP). A sustainable tourism industry is crucial to the normalization of the Malaysian economy.
As a start, whilst the government may not be inclined to waive interest for three months, an alternative will be to reduce interest rates of at least 2%, especially for bank loans with a fixed interest rate or double the current interest rates. This will help to reduce their financial burden and allow them to survive, until there is a full reopening of the economy from the endless total or partial shutdowns/ MCOs.
Lim Guan Eng