Malaysia plans $2.7 bn economic stimulus
Malaysia's government unveiled plans Thursday to inject 10 bn ringgit ($2.7 bn) to stimulate the sagging economy and avert a recession.
By Agencies |
LUMPUR: Malaysia's government unveiled plans Thursday to inject 10 bn ringgit ($2.7 bn) to stimulate the sagging economy and avert a recession.
This will bring the total stimulus spending to 17 bn ringgit ($4.6 bn) after a 7 bn ringgit ($1.9 bn) package announced in November. But some economists warned it may be insufficient to keep recession at bay.
The proposed second stimulus plan was tabled in Parliament by Deputy Finance Minister Kong Cho Ha for debates before it is approved by lawmakers.
Kong said five billion ringgit ($1.35 bn) will be used for development and the rest for operational expenses. He said the government may increase the amount later but didn't give further details.
Many economists have predicted Malaysia's trade-driven economy may plunge into a recession this year, its first since 1998.
The economy grew a dismal 0.1 percent in the fourth quarter of last year, bringing full-year growth to 4.6 percent, falling short of the official target of 5 percent.
The central bank has slashed interest rates three times since November and the government has indicated it may cut its 2009 growth forecast of 3.5 percent amid the protracted turmoil in the global economy.
AmResearch in a recent report estimated the government needs at least 40 bn ringgit ($11 bn) in increased spending, or five percent of gross domestic product, to prevent the economy from contracting this year.
It said the manufacturing slump would continue until September. AmResearch urged the government to consider making 2008 a tax-free year to ease the public's burden and give cash or introduce a cash-bonus system for middle and low-income workers, families with school-going children, and farmers.
This will bring the total stimulus spending to 17 bn ringgit ($4.6 bn) after a 7 bn ringgit ($1.9 bn) package announced in November. But some economists warned it may be insufficient to keep recession at bay.
The proposed second stimulus plan was tabled in Parliament by Deputy Finance Minister Kong Cho Ha for debates before it is approved by lawmakers.
Kong said five billion ringgit ($1.35 bn) will be used for development and the rest for operational expenses. He said the government may increase the amount later but didn't give further details.
Many economists have predicted Malaysia's trade-driven economy may plunge into a recession this year, its first since 1998.
The economy grew a dismal 0.1 percent in the fourth quarter of last year, bringing full-year growth to 4.6 percent, falling short of the official target of 5 percent.
ADVERTISEMENT
The central bank has slashed interest rates three times since November and the government has indicated it may cut its 2009 growth forecast of 3.5 percent amid the protracted turmoil in the global economy.
AmResearch in a recent report estimated the government needs at least 40 bn ringgit ($11 bn) in increased spending, or five percent of gross domestic product, to prevent the economy from contracting this year.
It said the manufacturing slump would continue until September. AmResearch urged the government to consider making 2008 a tax-free year to ease the public's burden and give cash or introduce a cash-bonus system for middle and low-income workers, families with school-going children, and farmers.
Download
The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.
The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.
Download
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
ADVERTISEMENT
