● On June 15, Prime Minister Tan Sri Muhyiddin Yassin announced the National Recovery Plan, a phased exit strategy from the COVID-19 crisis and the
   Movement Control Order (MCO), which will be enacted from June to December 2021.

- The National Recovery Plan consists of four phases:

• Phase 1 (June): The current implementation of the Full Movement Control Order (FMCO) with only essential services allowed to operate. This comes amid the high level of local COVID-19 cases, the critical state of the public healthcare system, and low vaccination rates. This phase began early June and has recently been extended to June 28.
• Phase 2 (July & August): Social activities and movement will continue to be tightly controlled, with interstate travel prohibited, but economic activities will be opened up in stages by allowing up to 80.0% of workforce capacity. The list of sectors allowed to operate will be expanded and will include some manufacturing activities, such as cement to ensure the sustainability of construction, and retail activities such as electronics and computers to support those working from home.
• Phase 3 (September & October):All sectors of the economy will be allowed to operate, including all manufacturing sectors, but some activities with a high-risk of spreading COVID-19 (e.g. pubs and spas) will still be prohibited. The economic sector will remain at 80.0% capacity, while social activities will be gradually expanded, and parliament will be allowed to convene.
• Phase 4 (November & December): The final phase of the National Recovery Plan, which will see a full reopening of the economy. All economic sectors will be opened, more social activities will be permitted, as well as interstate travel and domestic tourism to be allowed.

- The transition between each phase is subject to achieving substantive progress in three main thresholds: 1) the number of daily cases of COVID-19 infections; 2)
  the capacity of the healthcare system, based on the usage of beds in ICU wards; 3) the level of the population vaccinated, based on the percentage of people that
  have received two full doses of the vaccine.

- The National Recovery Plan is long overdue to ensure Malaysia exit the pandemic speedily. Of importance is the fact that it takes into account both the daily
  average cases and percentage of the population vaccinated as the yardstick to measure progress. This will help ensure a long-term recovery by prioritising the
  attainment of national herd immunity, whilst also safeguarding public health at this juncture. Nevertheless, the economic impact of a sustained lockdown will be
  considerable, with Prime Minister Tan Sri Muhyiddin Yassin stating that the current MCO 3.0 is costing the country RM1.0b a day. However, the recent
  PEMERKASA+ fiscal package of RM40.0b and the goal to expand economic reopening as early as July, should help stem the adverse impact on Malaysia’s
  economic recovery.

Source: Kenanga Research - 16 Jun 2021