Towards stabilizing the economic impact of COVID-19 through fiscal policy in Malaysia

Abstract

A greater size of government spending, may be less efficient. This is contradicting with Malaysian practice because the current Malaysian fiscal policy has allocated a huge budget from the lowest income of individuals to the highest international trade with the aims of reducing the economic implications caused by the outbreak of COVID-19. This paper embarks on three objectives. First, to provide an overview of fiscal policy. Second, to investigate the impacts of COVID-19; and third, reveals the actions taken by the Malaysian Government to implement the recovery policy. This paper adopts an integrative literature review and published reports relating to fiscal policy and COVID-19. The findings show the consolidated efforts of Malaysian Government towards the current fiscal policy in stabilizing the economic impact after the Movement Control Order. This paper could be a prudent guideline for other countries to strategize their fiscal policies in steering the macro and socioeconomic development.