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Categories
| Second stimulus has little impact on inflation |
| Politics & Government 2009 | |||
| Written by Yong Min Wei | |||
| Monday, 02 March 2009 22:24 | |||
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He said the country's inflation rate would continue to decline in 2009 on the back of stable commodity prices and price reduction campaigns by several hypermarket and supermarket chains. “Our country’s inflation rate has eased from 8.4% in the third quarter (3Q) of 2008 to 5.9% in the fourth quarter,” he told the Dewan Rakyat during the debate on the royal address yesterday. He said the latest Consumer Price Index (CPI) figures pointed towards a slowdown, noting that the CPI moderated to 3.9% in January 2009 from 4.4% in December 2008. He said the pressure on global inflation began to ease in 4Q last year due to slower demand and falling of crude oil and food prices. Met by reporters at the parliament lobby, Nor Mohamed said Malaysia was not in a technical recession as it recorded positive growth in the last quarter, noting that the textbook definition of a technical recession was two consecutive quarters of negative growth. “To me, it is not so important whether we are in a technical recession or not. We certainly are facing very challenging times,” he said. Some investment banks and economists have a more narrow definition of technical recession by considering it to be two consecutive quarters of contracting growth instead of negative growth. The Second Finance Minister said it was paramount for the government to boost the confidence of investors especially in an economic downturn, as growing concerns of increasing unemployment and retrenchment would only lead to a vicious cycle. He also said with are number of major corporations liquidated in the US, Europe and neighbouring Singapore due to the financial crisis, the government understood the nation’s economy would not be spared. Referring to the second stimulus package as a mini budget, Nor Mohamed said the new package would be bigger, more comprehensive and would have allocations for all sectors of the economy as well as tax measures that could help mitigate the effect of the global slump on the national economy. “It may be a mini budget but the effect would be great,” he added.
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