(Disclaimer, Everything I write here is based on my own personal view)
With the budget of 2021 getting closer, I am sure a lot of Malaysian are getting anxious about it.
From my point of view, there is the only way left to save it and that is a deflation strategy. The reason is the government has already used the stimulus money move, the effect will only get lesser as the money value drop.
As of October 2020, the amount of stimulus money has reached around RM305 billion. All this money doesn't come free, it has to be payback.
A deflation strategy have 2 advantage,
1) It will not overburden the banking sector. This will free up funds to be used for developing other sectors.
2)It will buy time for the affected sector by making their reserve last longer and allow the company to use the fund to makes the necessary changes like changing their business model.
The main move for this deflation is to make the cost of living go down. One of it is the government and bank decide which company debt to write off but that company must produce their good or service at a lower price.
For example: if a milk production company has RM1 million debt, the debt will be written off in exchange for producing 1 million boxes of milk at RM1 less than the usual price.
The other way is if the government still wants to use stimulus money to do it. Then the other way is to make a contract with the company to lower down their selling price. The government will help the company cover its losses.
Using other moves will only make things worse. Using stimulus money will only make the debt bigger while increasing the tax to pay back the debt will only cause more companies to close down. This is a checkmate for the current finance minister who is in charge of the 2021 budget.
Good one