[COLUMNIST] Do public holidays boost the economy?

However, some industrial players claim that this additional public holiday will cause them losses due to the interrupted production process.

In this article, I attempt to give a balanced view from the economic point of view on the impact of public holidays.

Public holidays can have both positive and negative impacts on the economy, depending on various factors.

On the one hand, public holidays can boost the economy by increasing consumer spending, particularly in the tourism and hospitality sectors. During public holidays, people often take vacations, travel to visit family and friends, or engage in leisure activities. This increased demand for goods and services can lead to a rise in sales and profits for businesses, which in turn can stimulate economic growth.

Additionally, public holidays can provide an opportunity for businesses to increase their sales through promotional events and discounts, which can attract more customers and generate more revenue.

On the other hand, public holidays can also have negative effects on the economy. For example, if businesses are required to close on public holidays, this can result in lost productivity and income. Additionally, public holidays can cause disruptions in supply chains, which can lead to increased costs and reduced efficiency.

Moreover, the economic impact of public holidays can vary depending on the timing, types and duration of the holiday. For example, a long weekend may encourage more people to travel, whereas a single-day holiday may not have a significant impact on the economy.

Overall, from an economic perspective, there are public holidays that have an insignificant impact while there are public holidays that have a positive impact on the economy. We need to study the types of public holidays and their impact on the economy before making any judgments.

In the context of the Aidilfitri celebration, the injection of household spending has a positive impact on the entire economy. The fact that quarterly gross domestic product (GDP) grows faster when there is a seasonal event such as the Aildifitri celebration. If the Aidilfitri celebration gives economic loss to the economy, then why the second quarter GDP growth is always expanded larger than in other quarters?

At the same time, according to one source, Malaysia is one of the countries that has many public holidays (see Figure below). Observations have found that high-income and productive countries tend to have fewer public holidays.

Eid Mubarak to all Malaysians celebrating Hari Raya Aidilfitri.

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