Malaysia will start treating Covid as ‘endemic’ around end-October, trade minister says

Malaysia will start treating Covid-19 as an endemic disease around the end of October, the country’s International Trade and Industry Minister Mohamed Azmin Ali said Tuesday.

Covid would be endemic when the SARS-CoV-2 virus that causes the disease becomes a permanent presence in the community and continues to circulate among people. Other endemic diseases include influenza, dengue and malaria.   

Malaysia has been struggling to tame a surge in daily Covid-19 cases, which led the government to impose multiple rounds of lockdowns. The country’s central bank last month downgraded its forecast for 2021 economic growth to 3% to 4%, from 6% to 7.5% previously.  

But Malaysia’s economy has remained resilient, with the recovery driven by better external demand and ongoing infrastructure projects, said Azmin, who’s also a senior minister in the current government.

“Vaccine affordability and accessibility are key factors in ensuring sustained economic recovery,” the minister told CNBC’s “Squawk Box Asia.”

More than 75% of Malaysia’s adult population is expected to be fully vaccinated by end-October, said Azmin. Currently, 88% of adults — or around 63% of the entire population — has received at least one dose of Covid vaccine, according to official data.

Health Minister Khairy Jamaluddin said last week that the Malaysian government will simplify some social-distancing measures in the coming weeks to prepare for a Covid endemic phase. But face masks will still be required to limit the spread of the coronavirus, he added.

Global supply chains

In addition to Malaysia, Southeast Asian countries including Indonesia, Thailand, Vietnam and the Philippines have experienced a resurgence in Covid-19 cases caused by the more transmissible delta variant.  

Southeast Asia plays an important role in the global manufacturing supply chain, particularly in semiconductors and key apparel, said Joseph Incalcaterra, chief economist for ASEAN at HSBC.

Incalcaterra told CNBC’s “Squawk Box Asia” on Monday that Malaysia is a major producer of automotive semiconductors, which have been short in supply. Fortunately, more manufacturing capacity in Malaysia is coming back online, said the economist.

“But if you look at Vietnam — which of course is a key producer of apparel, of different types of clothing especially in south of the country — that’s going to have an impact for the weeks and months to come,” said Incalcaterra.

Vietnam has locked down its biggest city and business hub Ho Chi Minh City, located in the south of the country. But the city could reopen economic activity in phases starting next week, reported Reuters.

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