Malaysia to make policy changes in 2nd stimulus plan-report

By Tuesday February 10th, 2009 No Comments

KUALA LUMPUR, Feb 10 (Reuters) – Malaysia’s government will focus on policy changes in its second stimulus package instead of increased spending as it tries to steer the economy away from a widely anticipated recession in the next six months, The Edge financial daily reported on Tuesday, citing unidentified sources.

Malaysia’s first spending package totalled 7 billion ringgit ($1.9 billion) and economists expect the new fiscal boost to be worth 7-10 billion ringgit.

“The second package will involve more policy changes rather than outright spending by the government, mainly as the government had announced large pump-priming measures, such as for infrastructure, in the first stimulus package,” one source was quoted as saying.

Last week, Malaysia’s Deputy Prime Minister Najib Razak said the government is ready to take “radical” steps to increase demand and will discuss plans at a meeting on Tuesday.

The new package may feature tax cuts for businesses and individuals, but the main focus would be on keeping people employed, The Edge reported.

Malaysia’s government still forecasts economic growth of 3.5 percent this year, although most private sector economists say growth is likely to be closer to zero.

Source : Reuters

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