Malaysia is facing a difficult time due to the global economic downturn but the country has still not entered into recession, Second Finance Minister Tan Sri Nor Mohamed Yakcop said. The government is prepared to take proactive measures to stimulate the economy in the country and ensure that the people, especially the unemployed get better treatment through the strategy that will be presented under the country’s
upcoming mini budget.
“We are not in recession yet. Recession is defined as two consecutive quarters of negative growth in real gross domestic product (GDP),” noted the Minister when asked to comment on the current economic scenario in the country.”We are facing a challenging time,” Yakcop told reporters after winding-up the debate on the motion of the King’s address at the Parliament per Bernama.
The country recorded a GDP growth of only 0.1 percent in the fourth quarter of 2008 compared with a growth of 4.7 percent in the third quarter. For the whole of 2008, Malaysia recorded a GDP growth rate of 4.6 percent compared with 6.3 percent in 2007.
Being an open economy, the global economic downturn will have some impact on the economic growth of the country.
“The economic slowdown in other countries like the United States, Europe and Singapore where many companies have gone bankrupt and many workers have lost their jobs has become a challenge for Malaysia, which is small and dependent on global trade,” the Second Finance Minister said.
Deputy Prime Minister and Finance Minister, Datuk Seri Najib Tun Razak will table the mini budget at the Parliament on March 10. Yakcop also said that among the major items that will be discussed in the mini budget will be on ways to boost the level of confidence among the public, especially investors.
“We believe that we can retain confidence level in the economy through a strategy that we will take, and via working very closely with the private sector.”
Meanwhile in his speech, he said the second economic stimulus packagewas not expected to have a significant impact on inflation. In fact, the country’s inflation is expected to subside this year, supported by moderating commodity prices and the price reduction campaign undertaken byseveral retailers.
In January, Malaysia’s Consumer Price Index stood at 3.9% compared with 4.4% in December 2008. To date, a total of RM5 billion out of the RM7 billion allocated under the first economic package has already been distributed to more than 20 ministries andagencies involved and they are in various stages of implementation. A total of 8,474 projects worth RM567.9 million have been carried out to date.