As the government moves to sustain the domestic economy that has been hit by the Covid-19 pandemic, a declaration of a state of emergency could further lead to a flight of foreign investors, according to several economists.

The possibility of declaring an emergency was first speculated on Friday after Prime Minister Muhyiddin Yassin's audience with the Yang di-Pertuan Agong Sultan Abdullah Sultan Ahmad Shah.

Universiti Malaysia Sarawak economist Shazali Abu Mansor said while an emergency state could temporarily restore political stability, certain segments of foreign investors...