Najib: No plans for 3rd stimulus package

Tags: fiscal deficit | Najib | stimulus package

Written by Bernama

Wednesday, 01 July 2009 14:52

KUALA LUMPUR: Datuk Seri Najib Razak says there are currently no plans for a third stimulus package as Malaysia wants to avoid incurring too high a fiscal deficit, according to a Bernama report.
    Najib who is also Finance Minister, said on July 1 the second stimulus package worth RM60 billion unveiled in March this year was designed to cover a period of two years.
    The first package valued at RM7 billion was introduced in November last year.The two stimulus packages had totalled RM67 billion and it accounted for about 9% of GDP.
    "I am trying to avoid a third stimulus package. There is a risk of that (higher fiscal deficit) happening if we introduce a third package.
    "But if there are ways where we can further stimulate our economy, I am quite open to it if necessary. I am keeping a very close watch in terms of the fiscal deficit," he said during an interview with Adam Bakthiar on financial news television channel CNBC aired by Astro.
    Najib was responding to a question as to whether Malaysia would introduce a third stimulus package if the global economy and Malaysia encounters a downside later this year.
    If there was a third package, the funds would have to be drawn from the liquidity in the market and not from the government's account, he said.
    When asked whether there would be any further downgrade assessments in Malaysia's economic growth, Najib said it all depends on how these stimulus
packages work.
    "So, if the economic packages work well, then we should be on track to achieve the contraction of four to five percent as we predicted," he
said.
    He said that in the second half of this year, the economy should see a step up in terms of the implementation of the packages and the funds being disbursed.
    "We believe that by end of this year and early next year, we should see a steady global economic recovery. When that happens, Malaysia will be in a better position and much more high up on the radar screen of investors," he added.
    To another question, Najib said the government has no plans to internationalise the ringgit in view of the risks involved. "    We have learnt
a painful lesson from the Asian Financial Crisis in 1997/98," he said.
     He said there was no demand for internationalising the ringgit because the ringgit was readily exchangeable anywhere.
    "We do not want to manipulate the market in any way. Allow the ringgit to find its true value. That has been our policy and we will maintain our policy," he said.
    The ringgit opened at 3.52 against the U.S. dollar this morning from 3.51 yesterday. - Bernama

Excerpt of CNBC interview with Najib< Prev		Next >HSBC survey: Most fund managers positive on Greater China equities

Last Updated on Wednesday, 01 July 2009 14:59

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