Can Najib’s RM60b economic stimulus do the trick?
Finally, they seem to be taking the economic crisis a bit more seriously. Or maybe they just didn’t want to make us panic and to undermine business confidence any further by telling us that dark clouds lay ahead. But the cat is out of the bag now.
Malaysia wakes up to crisis
By Anil Netto
PENANG – A big new economic stimulus package unveiled by Malaysia’s Finance Minister and Deputy Prime Minister Najib Razak is being viewed as belated official recognition that the country is being hard hit by the global economic and financial turbulence, with worse to come.
The Malaysian economy grew by just 0.5% last quarter and many economic analysts have predicted a technical or real recession later this year. The government has revised its own forecast for 2009 down to between negative 1% and positive 1% growth in gross domestic product (GDP).
As one of Asia’s most trade-oriented economies, with exports accounting for around 125% of GDP in recent years, the collapse in external demand is taking a growing toll. Swiss bank Credit Suisse said in a recent report that “[Malaysia's] downside risks are the highest in Asia, after Hong Kong and Singapore, especially given the big drop in commodity prices.”
On March 10, Najib announced a new 60 billion ringgit (US$16 billion) stimulus package, the second such package the government has announced since November. The allotment exceeded the expectations of many analysts, who predicted it would be closer to 30 billion ringgit. Even so, the market reaction to the new package has so far been mixed.
