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Nov 18, 2008

Malaysia Not In Recession

THE country is not undergoing a recession but faces slower economic growth that will end next year, Deputy Finance Minister Datuk Kong Cho Ha said yesterday.

He said Malaysia had recorded good growth in gross domestic production last year and the first half of this year.

"Only a country which records negative growth in its GDP is considered to be hit by an economic recession," he said in reply to Datuk Nur Jazlan Mohamed (BN-Pulai).

Kong said the country recorded 6.3 per cent growth in GDP last year, with the first quarter of this year seeing growth of 7.1 per cent and 6.3 per cent in the second quarter.

However, he said the country would not be spared the effects of the global economic crisis.
"We expect the country to record five per cent growth this year and 3.5 per cent next year," he said, adding that a policy response had been established to counter the possibility of a financial crisis.

The government had also introduced a RM7 billion economic stimulus package funded by savings, including that obtained from the cut in petrol subsidies.

Kong said employees had the choice of cutting an additional three per cent in Employees' Provident Fund (EPF) contributions to help boost consumer spending as this would give the government a surplus of RM4.8 billion.

He said small and medium-scale industries also had schemes to maintain a healthy cash flow, particularly in the manufacturing sector.

Kong added that local banks were also not experiencing a credit crunch, as seen in other countries.

Source : NST
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