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Najib promises bigger second stimulus package

By Wednesday February 18th, 2009 No Comments

KUALA LUMPUR (Feb 17, 2009) : Datuk Seri Najib Abdul Razak said today he will table the second economic stimulus package in the Dewan Rakyat on March 10, promising that it will be “bigger and more comprehensive” compared to the first one announced last November.

Addressing concerns about the economy raised in the Dewan Rakyat today, the deputy prime minister and finance minister said the government will also be reviewing its earlier 3.5% economic growth forecast for this year in line with new challenges that have surfaced.

“In view of the current situation and challenges, the second stimulus package will be more wholesome in nature compared to the first stimulus package (of RM7 billion) tabled last November. This package has been dubbed as a mini budget for the country,” he added.

He declined to disclose the allocation involved, saying the detailed analysis and valuations are being done now to take into account the current economic landscape.

He said they are exploring and considering the additional needs of small medium enteprises to be included in the second package, and those projects needed for both urban and rural areas.

In his reply, Najib gave some grim statistics, although there were some positive numbers as well.

Among the key indicators:

– The International Monetary Fund (IMF) has reviewed the estimated global economic growth for 2009 from 2.2% to 0.5%, while the global trade growth estimates have been reviewed to negative 2.8% from positive 2.8%.

– The stock market standing at 903.52 points from its high point of 1,519.22 points on Jan 11 last year.

– The country’s exports experienced a fall of -2.6% in October last year, -4.9% (November) and -14.9% (December).

– The industrial production index (IPI) also deteriorated when October recorded -2.8%, November (-8.2%) and December (-15.5%).

– Job cuts from October 2008 to January 2009 totalled 10,277 and 4,207 under the voluntary separation scheme for the same period.

Najib reiterated that the economic fundamentals of the country was still strong and that it had growing international reserves of up to USD 91.3 billion (RM332.6 billion ) as of Jan 30, 2009, and is able to support 7.5 months of delayed imports.

He also said the banking system was strong and competitive especially the Islamic banking system and thus more resistant to the global monetary crisis.

Najib added that, the level of unpaid debts was also low at 2.2%.

“The inflation rate is also projected to be stable. It is expected to rise at a low rate in 2009,” said Najib.

The level of the national gross savings remained at a high level of 37% of the GDP in 2008.

“This situation provides an advantage and flexibility to the country to harness more available resources to support private sector activities and the country’s economic growth as a whole. With the implementation of the first and second stimulus packages, the government with the full support of all concerned, including the private sector and the people, is confident of avoiding experiencing the economic downturn,” he said.

Meanwhile, Prime Minister Datuk Seri Abdullah Ahmad Badawi said only 70% of the RM7 billion economic stimulus package has been disbursed and told the public sector to buck up in planning and implementing people-oriented projects under the package, Bernama reported.

He said if the money was not spent quickly the government’s effort to stimulate growth to cushion the impact of the global economic recession would not be realised.

“We understand that the allocation has been given, so it is the duty and responsibility of all of us to work as quickly as possible so that the projects can be implemented,” he said at the Defence Ministry’s monthly assembly here yesterday.

On the second package, he said: “This will surely involve a big expenditure, maybe more than that given out last November. This calls for all of us (in the public sector) to work harder so that what has been allocated is implemented as soon as possible.

Source : The Sun

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