Covid-19 Impact: Fiscal and Monetary Policies in Malaysia, Singapore, and Indonesia

Abstract

Following the coronavirus pandemic (COVID-19) that occurred in 2020, indirectly affected the rate of economic growth globally. The economies of Malaysia, Singapore and Indonesia have not escaped the effects of weak global demand and domestic containment measures. This study applied the three-equation model macroeconomic framework and balanced panel data to analyze fiscal and monetary policies in these countries during the COVID-19 crisis from various official agencies. The Fixed Effects Model is the appropriate model chosen to determine the role of policy. The main findings of the study show that government spending is positively significant at the 0.01 level with gross domestic product. Therefore, during the COVID-19 crisis, fiscal policy is more effective for the economic growth of Malaysia, Singapore and Indonesia. This model is consistent, stable and robust. The study also recommends sound fiscal policies and the implementation of a sustainable policy mix framework to mitigate the
disruption of COVID-19.