What is the economic cost of lockdowns versus the virus?

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Economic Damage Primarily Attributed to Lockdowns, Not the Virus Itself

The economic repercussions stemming from the implemented lockdowns are estimated to be substantial, far outweighing the direct economic impact of the virus. Projections indicate that if movement control orders persist until mid-July, the cumulative economic cost could reach RM107 billion. This figure highlights the significant financial strain imposed by containment measures on businesses and the broader economy.
Financial Impact of Extended Lockdowns

The continuation of lockdowns is projected to incur a total economic cost of RM107 billion, assuming these measures remain in place until mid-July. This estimation underscores the severe financial burden that extended periods of restricted economic activity place upon the nation. The Minister of Finance had previously warned that the MCO 3.0 lockdown alone could reduce economic growth by one per cent.
Potential Consequences of a Full Lockdown

A comprehensive, full-scale lockdown scenario presents a stark outlook for employment and business income. Such a measure could potentially lead to an unemployment rate reaching one million individuals, impacting approximately four million people. Furthermore, around 2.8 million enterprises are anticipated to experience a reduction in their income under these stringent conditions.
Broader Economic Scenarios and Business Viability

Recent analyses suggest an increased likelihood of a recessionary economic scenario, estimated at around 35 per cent, with a weak recovery now projected at 55 per cent. Independent organisations, such as the SME Association of Malaysia, have reported substantial business closures, with 100,000 small businesses already ceasing operations and an additional 50,000 at risk. Surveys also indicate that over 90 per cent of micro, small, and medium enterprises are facing closure risks, with a significant portion able to sustain operations for only three to six months.

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What is the economic cost of lockdowns versus the virus?

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