The Covid-19 outbreak could cost the country’s economy RM5.9 billion this year and the figure could rise further if authorities around the world fail to contain the spread of the deadly virus.

The tourism sector had been hit the hardest. Fear of the virus had forced travellers, especially from China, to postpone their trips. Major airlines had cancelled or reduced flights to China.

AmBank Group chief economist and head of research Dr Anthony Dass said using the estimated GDP forecast of 4.6% and minus 0.4% point, the drop is equivalent to RM5.9 billion.

“If we take the estimated GDP nominal value of about RM1,600 billion for the full-year 2020, a 0.4% drop will be around RM6.4 billion.

“Slower growth would affect business cashflows and orders. It will add pressure on retrenchment as more companies downsize,” he told The Malaysian Reserve (TMR).

World Bank said sectors which are impacted by Covid-19 in Malaysia are tourism, foreign direct investment (FDI), supply chains and commodities, which include palm oil and oil and gas (O&G).

The Malaysian Association of Hotels said up to 157,000 room bookings valued at RM66 million had been cancelled. Most of the cancellations involved visitors from mainland China besides Singapore, Hong Kong, Taiwan, Vietnam and Europe.

Tourism-related industries like tour services and retailers have been hit as tourist arrivals drop significantly. Malaysia received 10.28 million visitors from Singapore and China in the first nine months of last year.

Putrajaya is targeting 10 million foreign visitors to the country this year with tourist receipts of RM100 billion or about 7% of the country’s GDP.

Malls and retailers are already reeling with a drastic drop in footfalls, including for the big-spending tourists. Manufacturers have also warned of raw material disruptions which will slow production and sales.