Ambank expects unemployment rate to fall to 4.4pc this year

KUALA LUMPUR, Oct 11 — Ambank Research expects Malaysia’s 2021 full-year unemployment rate to decline to 4.4 per cent from 4.8 per cent previously as the labour market continues to recover following the reopening of the economy, albeit at a moderate pace.

However, the research firm said there is a need to remain cautious, as the uncertainties surrounding the new Covid-19 virus variants and business prospects could put a lid on job prospects.

“There is a need to look at the underemployed segment and those in the informal sector.

“It will take a few years, likely around 2023, for the country to reach an unemployment rate around the pre-pandemic level of 3.3 per cent,” it said in a research note today.

Ambank Research said the unemployment rate had improved to 4.6 per cent in August after peaking at 4.8 per cent in June and July, possibly due to the easing of restrictions and gradual reopening of the economy, coupled with the high vaccination rate that allowed more sectors to operate.

“With 90 per cent of the adult population vaccinated, we expect the economy to move into the endemic Covid-19 phase by end-October.

“This will allow more sectors to be reopened with new Covid-19 norms being practised, reinforcing growth and labour market prospects,” it said.

The number of unemployed persons reduced to 748,800 in August, and the number of employed persons rose by 81,800 to a record 15.38 million persons, with the employment-to-population ratio increasing to 65.2 per cent from 65 per cent in July. — Bernama