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Below are reported in Bernama the highlights of RM60b stimulus plan:-

# RM15 billion fiscal injection;

# RM25 billion guarantee funds;

# RM10 billion equity investments;

# RM7 billion private finance initiative and off-budget projects;

# RM3 billion tax incentives;

# unemployment rate in 2009 to jump to 4.5 per cent from 3.7 per cent in 2008;

# RM700 million allocated to create 163,000 new jobs;

# Housebuyers given tax relief on interest paid on housing loans up to RM10,000 a year for three years (new purchases);

# Additional RM200 million for public low-cost housing scheme for low-income earners;

# RM1.6 billion fund to promote investments;

# RM200 million to repair and maintain roads and drains;

# RM150 million for renovation, maintenance and repairs to welfare homes, fire and rescue stations, firemen living quarters and public toilets in mosques,suraus and tourist spots;

# Government to issue syariah-compliant Savings Bonds amounting to RM5 billion this year;

# RM1.95 billion to build and upgrade facilities in 752 schools, particularly in rural areas, Sabah and Sarawak of which RM300 million will be used to improve facilities in government-aided religious schools, Chinese and Tamil schools and mission schools;

# RM230 million allocated to increase electricity supply coverage and water supply in rural areas particularly in Sabah and Sarawak.

# RM350 million allocated for rural road construction.

# Retrenched workers’ tax-exempt compensation raised to RM10,000 for each year of service from RM6,000 previously;

# To raise windfall profit levy on oil palm to RM2,500 per tonne for Peninsular Malaysia and to RM3,000 per tonne for Sabah and Sarawak;

# All government procurements will be made through open tenders or restricted tenders except for specific cases.

# To raise state investment firm Khazanah Nasional’s investment funds by RM10 billion.

# Effective April 1, levy payment rate to be reduced to 0.5 per cent from one per cent for all employees for a two-year period;

# Additional RM200 million for the Automotive Development Fund;

# Government to assist in the auto scrapping scheme for Proton and Perodua– a discount of RM5,000 will be given to car owners who trade in their cars which are at least 10 years old to buy new Proton and Perodua cars;

# Malaysia Airports Holdings Bhd to build and operate a new low-cost airport at the Kuala Lumpur International Airport estimated to cost RM2 billion;

# RM250 million to expand Penang International Airport;

# A 50 per cent rebate on landing charges will be given for two years effective April 1 to all airlines that operate from Malaysia;

* To improve companies’ cashflow, the government proposes that their current year losses be allowed to be carried back to the immediate preceding year. The total losses allowed to be carried back is RM100,000;

# The services sector will be further liberalised to woo more investments, bring in more professionals and technology and strengthen competitiveness;

# Foreign Investment Committee to adopt a more liberal approach to bringpositive changes and nurture a more investor-friendly environment to attractmore investments including foreign direct investment. – Reuters, Bernama

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Malaysia has registered a growth of 4.6 per cent for 2008, Deputy Prime Minister and Finance Minister Datuk Seri Najib Razak announced yesterday.

The earlier gross domestic product (GDP) target for 2008 was 5 per cent. GDP growth in 2007 was 6.3 per cent.

Najib said the slower growth was due to the worsening global economy that had caused a significant drop in the country’s exports.

“The global economic scenario is getting more critical and a prolonged recession is expected,” he said at a press conference in Putrajaya yesterday.

For the October-December period, Malaysia’s GDP grew 0.1 per cent compared with 4.7 per cent in the third quarter. This was the lowest quarterly GDP growth since 2001, but still credible compared to other economies that were hit worst by the global economic crisis.
Singapore’s economy contracted 4.8 per cent in the fourth quarter, bringing 2008 GDP growth to just 1.1 per cent. Japan recorded minus 4.6 per cent growth in the fourth quarter and minus 0.7 per cent for the full year.

Malaysia’s manufacturing sector contracted by 8.8 per cent from a growth of 1.8 per cent in the third quarter due to weaker demand for electronic and electrical products.

Najib said the services sector grew 5.6 per cent, while the manufacturing, mining and construction sectors recorded negative growth of 8.8 per cent, 5.7 per cent and 1.6 per cent respectively.

Agriculture activities, meanwhile, saw a lower growth of 0.5 per cent due to a moderate increase in crude palm oil production (3.6 per cent) and a significant reduction in rubber production (-28.4 per cent).

He said it is unlikely that the current quarter will see any improvements.

“Of course it all depends on the situation in the US and Europe. We have to see the effectiveness of the fiscal stimulus and efforts to revive the banking sector in US.

“However, all signs indicate deeper and more prolonged recession, as even IMF (International Monetary Fund) and most countries have revised economic growth projections, including Singapore which did it four times,” Najib said.

He said the mini-budget to be tabled in Parliament on March 10 would help cushion the impact of a global recession on Malaysia, as the country would go into full gear to increase GDP growth by stimulating domestic demand. – BTimes

This would be complemented by other initiatives, including easier monetary policies. The fiscal deficit for this year would be maintained at its earlier estimate of 4.8 per cent of gross national product.

The government would likely revise its earlier GDP projection of 3.5 per cent for 2009, as it was no longer sustainable in view of the weakening external economic environment.

Najib said a new GDP target for the year would be announced on March 10.

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• Malaysian banks’ Tier-1 capital ratio high