KUALA LUMPUR, March 14 (Reuters) - Malaysia's economy is going to suffer in the first couple of quarters this year, a top minister was quoted as saying on Saturday, as the export-dependent country battles dying growth.
'The first two quarters are going to be bad,' Second Finance Minister Nor Mohamed Yakcop told the Edge financial weekly.
Nor Mohamed said the stimulus package will add 2.5 percent to 3 percent to the economy, and that in its absence the economy will contract by at least 2.5 percent.
Malaysia's growth came in at just 0.1 percent in the fourth quarter, and the government also on Tuesday cut its 2009 growth estimate to a range of 1 percent contraction to 1 percent growth from an earlier expectation of 3.5 percent expansion.
Exports, worth more than 100 percent of the Southeast Asian country's gross domestic product, fell 28 percent in January.
The stimulus package has been criticized by many economists for not including provisions for immediate relief, such as individual tax breaks and making money directly available to consumers to boost domestic demand.
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Nor Mohamed said this was because of Malaysia's growing fiscal deficit, which is officially forecast at 7.6 percent of gross domestic product this year. Malaysia has been running a deficit for the last ten years.
'If we have a government that faces no financial constraints, we can do many things,' Nor Mohamed said.
'But we start on the basis that money is limited, and for every ringgit that we spend there is of course growth, but there is also the deficit.'
When asked by the newspaper whether the government had run out of options to help the economy, he left the probability of another boost open.
'... we say this is not the silver bullet, not the last bullet,' Nor Mohamed said.
(Reporting by Varsha Tickoo; Editing by Lincoln Feast) Keywords: MALAYSIA ECONOMY/
Thomson Reuters
Forbes
14/03/09
'The first two quarters are going to be bad,' Second Finance Minister Nor Mohamed Yakcop told the Edge financial weekly.
Nor Mohamed said the stimulus package will add 2.5 percent to 3 percent to the economy, and that in its absence the economy will contract by at least 2.5 percent.
Malaysia's growth came in at just 0.1 percent in the fourth quarter, and the government also on Tuesday cut its 2009 growth estimate to a range of 1 percent contraction to 1 percent growth from an earlier expectation of 3.5 percent expansion.
Exports, worth more than 100 percent of the Southeast Asian country's gross domestic product, fell 28 percent in January.
The stimulus package has been criticized by many economists for not including provisions for immediate relief, such as individual tax breaks and making money directly available to consumers to boost domestic demand.
Comment On This Story
Nor Mohamed said this was because of Malaysia's growing fiscal deficit, which is officially forecast at 7.6 percent of gross domestic product this year. Malaysia has been running a deficit for the last ten years.
'If we have a government that faces no financial constraints, we can do many things,' Nor Mohamed said.
'But we start on the basis that money is limited, and for every ringgit that we spend there is of course growth, but there is also the deficit.'
When asked by the newspaper whether the government had run out of options to help the economy, he left the probability of another boost open.
'... we say this is not the silver bullet, not the last bullet,' Nor Mohamed said.
(Reporting by Varsha Tickoo; Editing by Lincoln Feast) Keywords: MALAYSIA ECONOMY/
Thomson Reuters
Forbes
14/03/09
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