5:27 pm - Najib unveils RM60 bil stimulus package

Najib unveils RM60 bil stimulus package
Mar 10, 09 12:57pm
The government has unveiled a RM60 billion stimulus package today as it attempts to arrest the export-driven economy's slide into recession.
MCPX
The RM60 billion package will be implemented over a two-year period from 2009 to 2010.
Deputy premier Najib Razak, who is due to take over as prime minister at the end of this month, announced the details of the spending plan when tabling the Supplementary Supply Bill 2009, or mini budget, in Parliament. The package, which is equivalent to 9 percent of last year’s GDP, is broken down as follows:
RM15 billion in fiscal injection
RM25 billion in guarantee funds
RM10 billion in equity investment
RM7 billion for private finance initiative and off-budget projects
RM 3 billion in tax initiatives
“The implementation of such a large stimulus package is unprecedented in the nation’s economic history,” said Najib.
He warned that the economic growth for this year could go into negative territory of -1 percent.
Najib, who is also finance minister, had unveiled a RM7 billion stimulus package last year but acknowledged that the government needs a larger and more comprehensive mini-budget to avert the threat of a recession.
He said that the new stimlus measures will be focused on helping companies and workers affected by the global slowdown, to halt a steady stream of layoffs in recent months.
Malaysia's economic growth slowed to just 0.1 percent in the fourth quarter of 2008, hit by declining exports and manufacturing as demand from its trading partners in the United States and Europe evaporated.
Spending plan a major test for Najib
January exports plunged 27.8 percent year-on-year, hitting their lowest level since 2001.
Prices of commodities such as crude oil, palm oil and rubber, have also plunged.
The government has already acknowledged it may have to abandon its 3.5 percent growth forecast for 2009.
An influential think tank, the Malaysian Institute of Economic Research (MIER), said the economy is likely to sink into a technical recession in the first half of 2009 before making a recovery in the second half.
"The situation looks very grim and this package can probably help cushion the impact of the global downturn but cannot neutralise it," said MIER chief Mohamed Ariff Abdul Kareem.
The spending plan is a major test for Najib, who is taking on the top job one year after general elections that saw the ruling coalition battered by a resurgent opposition.
Within days of taking office he faces a series of by-elections which will be seen as a barometer of his popularity, and the coalition's ability to claw back support after the electoral drubbing.