COVID-19 incurred more unemployment: Forecasting future rate in Malaysia / A’ina Fariha Hasnol Hadi, Noor Aziera Noor Azman and Mimi Nursyafika Dided

In March 2020, due to the impact of the Movement Control Order (MCO), Malaysia’s rate of unemployment jumped to 3.9 percent which is the highest since June 2010 according to Laporan Tenaga Buruh Malaysia (2021), from the Department of Statistics Malaysia (DOSM). Unemployment has a negative impact on families’ disposable income, reduces purchasing power, lowers worker morale, and weakens an economy’s productivity. This study aims to identify whether COVID-19 is affecting the unemployment rate in Malaysia and to forecast the unemployment rate for the next 2 years using descriptive analysis and Box-Jenkins’s methodology. Secondary data of the unemployment rate from January 2016 to December 2020 are used. The results show an increasing trend in the data series and imply that ARIMA (2,1,2) is the best model to forecast the unemployment rate by considering all the RMSE, MAPE and MAE. It is found that the estimated unemployment rate continues to rise year to year.