Business

Thursday November 19, 2009

Minister: No plans for additional economic stimulus package

By IZATUN SHARI and DHARMENDER SINGH


KUALA LUMPUR: The Government has no plans to introduce additional stimulus package but it is confident of achieving a 5% economic growth next year, said Minister in the Prime Minister’s Department Tan Sri Nor Mohamed Yakcop.

He said it was possible to achieve the target and the Government would have to find ways and means to boost the economy.

“We all will have to put our heads together. We have to get the private sector to work with us. We can do it,” he said after the launch of Malaysia Economic Monitor, a bi-annual review of the Malaysian economy by World Bank, yesterday.

On how growth could be boosted, he said it would be based on domestic sector. “It is not a simple one. One way of doing it is to look at the whole economy. Then, see which sectors can be optimised more in the short term. It is complex but it will be done,” he added.

Tan Sri Nor Mohamed Yakcop (left) receiving the Malaysia Economic Monitor report from Vikram Nehru.

On the Malaysia Economic Monitor, he said the document would served as useful input as the Government was now formulating the 10th Malaysia Plan and the new economic model.

Nor Mohamed said Malaysia and the World Bank would soon sign a Framework Agreement on Advisory Services that would enable more ministries and agencies to draw in the expertise from the World Bank.

“I would encourage each ministry and agency to exploit the vast potential of this programme and take this opportunity to enhance their research and development capacities.”

Asked when was the right time for exit from the stimulus package, World Bank chief economist for East Asia and Pacific Region, Vikram Nehru, said it would be too early for Malaysia to withdraw its stimulus package now.

He said there was no sign of increased inflation or asset price increase which were cause for concern.

In the Malaysia Economic Monitor themed “Repositioning for Growth”, the World Bank forecast Malaysia’s gross domestic product would decline 2.3% this year before growing 4.1% next year, attributable to the country’s manufacturing sector which accounts for 30% of GDP.

The review proposes a four-pillar strategy consisting of efforts to specialise the economy further, improve skills of its workforce, make growth more inclusive and strengthen public finances.

Meanwhile, Second Finance Minister Datuk Seri Ahmad Husni Mohamad Hanadzlah said in Putrajaya yesterday that the Government would keep a close eye on the Japanese economy where indications of a probable second dip in the economy were surfacing.

He said the Malaysian economy could expect a good growth rate next year, especially with efforts already underway to find new sources for it to expand, but a dip in the Japanese economy would have an impact on the global economy and indirectly impact Malaysia.

“If there is a dip in the Japanese and subsequently the world economy, then Government will re-assess its stand and look at steps, including rolling out another stimulus package, to bolster the country’s economy against the impact of another economic slowdown,” he said.

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