In a note, Maybank IB Research said the year’s first Parliament session was rescheduled to May 18-June 23 from March 9-April 16 with the prospect of Pakatan Harapan putting in a no-confidence motion on Prime Minister Tan Sri Muhyiddin Yassin.
“According to an online news report, the PM briefed 115 MPs under his Perikatan Nasional (PN) coalition on his cabinet lineup, suggesting the numbers to survive any no confidence vote.
“However, fresh economic challenges and risks have emerged following the slump in crude oil prices in recent days. Brent crude tumbled to US$32 per barrel yesterday from this year’s high of US$69 per barrel on Jan 6 following the apparent collapse of the OPEC+ grouping,” it said.
The research house said its sensitivity analysis showed that a US$10 per barrel drop in the annual average crude oil price would reduce the government’s oil-related annual revenue by RM7 billion, raise the budget deficit to gross domestic product (GDP) ratio by 0.45 percentage point, and cut the current account surplus by 0.15 percentage point.
At the very least, Maybank IB said, the cabinet formation would reduce the implementation risk of the RM20 billion Economic Stimulus Package announced on Feb 27 in response to the COVID-19 outbreak.
Against long-standing tradition, the newly-unveiled cabinet lineup did not have a deputy prime minister post.
Instead, senior minister status is assigned to the International Trade and Industry, Defence, Works and Education portfolios, underscoring areas of policy priorities.
The four senior ministers will also chair cabinet meetings in the absence of the prime minister.
“Another notable cabinet announcement by the Prime Minister is the appointment of Tengku Datuk Seri Zafrul Tengku Abdul Aziz, the former group chief executive officer of CIMB Group Holdings Bhd, as Finance Minister,” it added.