KUALA LUMPUR (March 17): The Federation of Malaysian Manufacturing (FMM) has urged the government to step up support for its members, including a six-month bank loan moratorium for all micro, small and medium enterprises (MSMEs), amid rising uncertainties in the Middle East.
FMM president emeritus Tan Sri Soh Thian Lai stressed the need for Malaysia to prepare for broader economic challenges, including introducing fiscal stimulus measures to help MSMEs navigate ongoing uncertainties.
He suggested that the National Economic Action Council assess the need for support measures, including a possible six-month bank loan moratorium to assist MSMEs.
“Although Finance Minister II Datuk Seri Amir Hamzah Azizan has reportedly said a stimulus package may not be necessary at the moment, we think differently,” Soh told reporters after the FMM released its latest business conditions survey on Tuesday.
Soh noted that while MSMEs account for nearly 97% of business establishments in the country, many have been facing tight financial conditions since the Covid-19 pandemic.
“Proactive support would allow MSMEs to improve operational efficiency and bolster their capacity to export,” he said. “This is about ensuring they are financially resilient to weather ongoing uncertainties.”
In addition, Soh proposed that the Ministry of Investment, Trade and Industry roll out targeted programmes to help exporters expand market access and reduce reliance on traditional destinations. Suggested strategies include greater diversification into emerging markets such as Africa, Central Asia, South Asia, and Latin America.
Rising costs and growth outlook
Meanwhile, FMM president Jacob Lee Chor Kok said the group expects gross domestic product (GDP) growth to moderate to between 3.8% and 4.2% should tensions in the Middle East escalate further.
However, if the conflict remains contained, the FMM expects GDP growth to come in at 4.7%.
Lee highlighted that rising production and logistics costs have emerged as key challenges, with the construction sector among the hardest hit. Companies, however, are closely monitoring developments and adjusting sourcing, logistics, and inventory strategies as needed.
He added that some companies are still receiving strong orders, with many clients rushing to place purchases to hedge against potential cost increases. “A higher volume of transactions has been concluded, and manufacturers are factoring in extra margins to account for possible price spikes,” Lee noted.