Published December 8, 2008

KL sees quick impact from fiscal boost

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(KUALA LUMPUR) Malaysia's near US$2 billion fiscal stimulus will start to boost the economy from the first quarter of next year and the government does not expect the country to slide into recession, a government minister said.

Despite a downturn in global growth and an unexpected fall in exports in October, Malaysia's government still expects 3.5 per cent growth in 2009, Second Finance Minister Nor Mohamed Yakcop told journalists on Saturday.

'The trick is to implement these measures very quickly so that the impact is there in the next few months,' the minister pointed out. 'At this point of time, there is no possibility, from our calculations, that we will enter recession in 2009,' he added.

The government's forecast is higher than that of many banks.

UBS sees no growth in Malaysia in 2009 while Malaysian investment bank RHB is forecasting 1.5 per cent.

Data last week showed that exports fell by 2.6 per cent year-on-year in October compared with expectations of 6.3 per cent growth in a Reuters poll. -- Reuters