But economist says it will fall to 4-5% in 2010
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(KUALA LUMPUR) Unemployment in Malaysia could reach six per cent this year, its highest in more than 20 years, as the economy slows down significantly, Malaysia's Business Times reported economist Zainal Aznam Yusof as saying.
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| Severe slowdown expected: The Malaysian government expects the economy to grow by 3.5 per cent this year, from a targeted 6-6.5 per cent growth last year |
But as the economy picks up again, unemployment will fall to four to five per cent in 2010.
The government expects the economy to grow by 3.5 per cent this year, from a targeted 6-6.5 per cent growth last year.
Dr Zainal Aznam believes that the country's gross domestic product would likely experience a severe slowdown to two per cent this year.
'It is a shock to the system and the brunt is on employment.'
Malaysia has a working population of 11 million. A six per cent rate translates into 660,000 unemployed people.
'We should brace for a large overhang of unemployed, especially when the graduates enter the job market.'
Dr Zainal Aznam, who is a member of the high-level National Economic Council, said retrenchment was anticipated across all sectors of the economy although the bulk would be in export-oriented industries.
'So far, the (monthly) retrenchment is not huge yet, but it is going up,' he said.
Most of the laid-off workers in the construction and plantation sectors are expected to be foreigners, while it is the other way around in the services and manufacturing sectors.
The services sector, which is likely to recover fastest from the global slowdown, is expected to cushion the economic slowdown as it provides jobs.
The sub-sectors with potential include financial, tourism, education, health, information communication technology, professional services, construction-related services and manufacturing-related services.
Human Resources Minister S Subramaniam has said that more than 45,000 factory workers could be temporarily laid off during the Chinese New year period due to a drop in orders, Malaysia's Business Times reported.
They have been asked to take paid or unpaid leave for two or three weeks during the festive period.
Human Resources Ministry statistics show that 7,500 workers were laid off between October last year and Jan 14. The number included 2,000 foreigners in various sectors.
Most of the retrenchment was in the manufacturing sector involving local manufacturers and foreign multinationals.
The official unemployment rate for last year is not out yet, but the ministry has said that the number of retrenched workers should be around the previous year's 30,000.
A total of 102 employers had reported to the ministry that they would lay off 4,700 workers between this month and March.
The majority of these workers are in the electrical and electronics sector.
This includes 1,500 Western Digital workers who will be made redundant when the hard-drive disc manufacturer winds down its Sarawak plant by March.
Ministry secretary-general Thomas George, who chairs a committee set up to monitor retrenchment in view of the global slowdown, said retrenchment was at a manageable level.
'It is consistent with the global trend of having leaner and more productive organisations,' he said earlier this month.
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