PUTRAJAYA: The government will revise downwards the earlier 3.5% forecast Gross Domestic Product (GDP) for this year as the earlier projected figure was no longer sustainable in view of the weekening external economic environment.
Deputy Prime Minister Datuk Seri Najib Tun Razak said the new projected GDP percentage would be announced together with the mini budget on March 10, but declined to say how significantly lower the new projected percentage would be.
He said the recession that hit many global economies, including developed countries was expected to be more serious and this would certainly affect Malaysia’s economy.
Najib said that Malaysia’s actual GDP for the fourth quarter of 2008 saw a growth of only 0.1%; the lowest since the third quarter of 2001 when the growth rate -0.4%.
“I do not think that we can anticipate an improvement in the GDP figures for the next quarter (first quarter of 2009), but of course, it all depends on the situation in the United States and Europe.
“We will have to see how attractive their fiscal stimulus packages are and how much efforts are being put in to revive the banking sector in the US.
“But all signs indicate deeper and more prolonged recession. Even the International Monetary Fund (IMF) has revised its figures.
“Most countries have also done so. In fact, Singapore has revised its growth figures four times,” he told reporters on Friday.
Najib, who is also the Finance Minister said the introduction of the mini budget would help Malaysia’s economy weather the storm as efforts would be made to increase the GDP through boosting domestic demands, easier monetary policies and other incentives which the government plans to undertake.
“Our options, however, do not include the export market because the manufacturing is badly hit due to cancellation of exports,” he added.
Asked to comment on International Trade and Industry Minister Tan Sri Muhyiddin Yassin’s statement that the mini budget would see a figure of between RM10bil to RM15bil, the Deputy Prime Minister declined to comment, stressing the amount had yet to be finalised.
To a question, Najib stressed the government would not plan for stimulus packages if such efforts could not help the economy.
“We will do whatever we can, within our limitation. But one has to be mindful of (the fact that we have to plan) for not only this year but also for 2010 and beyond,” he said.
Source : The Star