No stimulus packages even in slowdown

Saturday August 21, 2010

By DHARMENDER SINGH
newsdesk@thestar.com.my

PUTRAJAYA: There will be no more stimulus packages as the Government wants to strengthen economic fundamentals even if there is a slowdown next year, Prime Minister Datuk Seri Najib Razak said.

“It is better to strengthen our fundamentals, like encouraging locals to invest more and carrying out projects offering spillovers and major multiplier effects,” he said.

“We cannot roll out the stimulus packages on a sustained basis – a physical stimulus is a last resort and should not be considered something expedient,” he said after chairing the National Financial Council meeting here yesterday.

Najib said the Government had to avoid frequent stimulus packages as they also increased the nation’s deficit.

Economic boost: Najib answering questions from the media after chairing the National Financial Council meeting at the Finance Ministry office in Putrajaya yesterday. Looking on are (from left) Deputy Finance Minister Daruk Dr Awang Adek Husin and Finance Minister II Datuk Seri Ahmad Husni Hanadzlah.

Malaysia, he said, would have to work towards increasing domestic demand and getting locals to invest in projects with major multiplier effects if the country was to sustain its targeted 6% economic growth in the coming years.

The prime minister said the recent strengthening of the ringgit would have minimal impact on Malaysia’s economy as it would not have much effect on the country’s exports.
The decline in economic growth in Europe, he said, was also estimated to have little impact on the country’s target of achieving 6% growth this year.

“But we have to (continue to) monitor developments outside the country – we are still confident of achieving 6% growth this year, but we have to ensure domestic demand is strong to achieve it.

http://thestar.com.my/news/story.asp?file=/2010/8/21/nation/6897805&sec=nation