Published December 23, 2008

More stimulus action from KL in February

News website says govt ready with another multi-billion ringgit package

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(KUALA LUMPUR) Malaysia will announce more measures in February to boost its economy, as falling tech sales and an expected rise in jobless numbers raise the spectre of a recession next year, an influential news website reported yesterday.
Mr Najib: Malaysia is not expected to slip into a recession

Malaysia has banked on strong Asian and domestic demand to shore up its economy but a deepening global slowdown is triggering doubts about how well it will weather the US-led economic crisis.

The South-east Asian economy will unveil a series of measures next year and is ready to announce another multi-billion ringgit stimulus package if necessary, the Malaysian Insider said without citing sources.

The government has already announced a RM7 billion (S$3 billion) package to stabilise its economy.

Government data shows that 30,000 Malaysians have lost their jobs so far and the Human Resources Ministry - which expects a jump in unemployment in the first quarter of next year - has asked the Cabinet for RM100 million to retrain laid-off workers, the report said.

Government officials have been asked to come up with initiatives to help middle-level management, who could lose their jobs by next year, and find work for 120,000 new graduates, it said.

Asked to comment on the report, Deputy Prime Minister Najib Razak said that the government was watching global economic developments.

'We do not know yet. It all depends on the global economic situation,' Mr Najib, who is also Finance Minister, said. 'Our concern is that we want to protect the rakyat (people) as much as possible and to ensure there is some growth in the real economy.' He said that Malaysia was not expected to slip into a recession although much would depend on the global economy.

Falling demand for the country's key tech exports is hitting the economy. Western Digital, the world's second-largest maker of computer disk drives, has shut its operations in Malaysia's Sarawak state on Borneo island and laid off all its 1,500 employees.

Malaysia has forecast economic growth of 3.5 per cent next year, the lowest in eight years.

'We still think that Malaysia will avoid going into a recession next year but nothing is being discounted,' the report said quoting an unnamed government official. 'Much will depend on whether our trading partners sink further and the level of confidence in Malaysia.' - Reuters