KUALA LUMPUR, March 10, 2009 (AFP) – Malaysia’s government is to unveil a multi-billion-dollar stimulus package Tuesday as it attempts to arrest the export-driven economy’s slide into recession.
Deputy premier Najib Razak, who is due to take over as prime minister at the end of this month, will announce details of the spending plan in parliament at 4:00pm (0800 GMT).
Malaysia unveiled a 1.9-billion-dollar stimulus package last year but has acknowledged that it needs a larger and more comprehensive mini-budget to avert the threat of a recession.
A government official familiar with the plan told AFP at the weekend that it could be worth up to 9.4 billion dollars.
An aide to Najib told AFP Tuesday that the package would be “substantial” but did not give a specific figure.
Najib has said that the new stimlus measures will be focused on helping companies and workers affected by the global slowdown, to halt a steady stream of layoffs in recent months.
Malaysia’s economic growth slowed to just 0.1 percent in the fourth quarter of 2008, hit by declining exports and manufacturing as demand from its trading partners in the United States and Europe evaporated.
January exports plunged 27.8 percent year-on-year, hitting their lowest level since 2001.
The government has already acknowledged it may have to abandon its 3.5 percent growth forecast for 2009.
An influential think tank, the Malaysian Institute of Economic Research (MIER), said the economy is likely to sink into a technical recession in the first half of 2009 before making a recovery in the second half.
“The situation looks very grim and this package can probably help cushion the impact of the global downturn but cannot neutralise it,” said MIER chief Mohamed Ariff Abdul Kareem.
The spending plan is a major test for Najib, who is taking on the top job one year after general elections that saw the ruling coalition battered by a resurgent opposition.
Within days of taking office he faces a series of by-elections which will be seen as a barometer of his popularity, and the coalition’s ability to claw back support after the electoral drubbing.
Source : AFP