Published August 20, 2009

No need for third KL stimulus package: minister

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(KUALA LUMPUR) Malaysia will not need a third stimulus package to boost its economy, a Malaysian official said on Tuesday.
Getting better: With the world economy recovering, KL is maintaining its economic forecast made earlier

The government believes economic growth will contract 4-5 per cent in 2009, as forecast earlier this year, said Malaysian Second Finance Minister Ahmad Husni Hanadzlah.

The world economy is recovering, making a third package for the country unnecessary, Mr Husni told reporters after chairing a meeting at Putrajaya, the administrative centre of the federal government.

The International Monetary Fund (IMF) has said there is room for the Malaysian government to further pump-prime the economy for stimulating purposes.

Mr Husni said the Project Management Unit would closely monitor the progress of the previous two stimulus packages announced earlier this year with reports submitted on a weekly basis. The implementation of the packages is based on the government's cash flow and so far it is on track, he added.

The government announced two stimulus packages worth a total of RM67 billion (S$27.5 billion) to curb the negative impact of the sluggish external business environment.

Touching on tax revenue, Mr Husni said he expected a drop of RM18 billion to RM160 billion and a further decrease in 2010.

This was due to the current economic situation, drop of fuel tax revenue, decrease in exports as well as lower corporate profits, explained Mr Husni. He hoped the government- linked companies doing well could contribute to the government in some form.

He also said that when the country becomes a high-income nation, the number of taxpayers would definitely be more than the current one million, expanding Malaysia's tax base. -- Xinhua