GREECE'S ECONOMIC CRISIS WILL NOT IMPACT THE MALAYSIA- PM NAJIB

KUALA LUMPUR, June 15 (Bernama) -- The economic crisis affecting Greece will
not adversely impact Malaysia as the country's exports to it, was only 0.1 per
cent of total exports last year, said Prime Minister Najib Razak.

Najib, who is also the Finance Minister, said Malaysia's financial status
remains strong as a result of the government's continued efforts in keeping
debts at a manageable level.

"At the same time, the country has sufficient guidelines to ensure the debt
level is stable and able to be serviced," he told Opposition MP Lim Guan Eng
in a written reply in parliament here Tuesday.

Lim had asked the Prime Minister to state the effects of Greece economic
crisis as well as the precautionary steps being taken by the government in
overcoming a similar situation.

Najib said the guidelines include a maximum domestic debt ratio of 55 per
cent to gross domestic product (GDP)while the Federal government's external debt
is limited to RM35 billion (US$10.6 billion).

He said in this regard, the guideline had helped minimise excess external
and domestic debt risk.

"At present, 96 per cent of the country's domestic debt is financed via
local sources, thereby minimising the foreign exhange risk. As of May 31,
Malaysia's international reserves totalled RM312.3 billion (US$95.5 billion),
sufficient to accommodate 4.4 times the external short-term debt of the
country," he added.

The Prime Minister said the government is always committed to ensuring any
expenditure is prudent, of quality and efficient, including efforts to implement
an open tender system while reducing spending that was not critical.

He said the government was also striving to introduce the Goods and Services
Tax (GST) and improve tax administration to enhance revenue.

"With the continuing strong economic growth and prudent financial management
as well as new initiatives under the Government Transformation Programme (GTP)
and the ongoing Economic Transformation Programme, the financial position of the
country is expected to improve further.

"With the prudent and pragmatic financial management of external debt, the
government is confident that it will not undergo a debt crisis similar to that
of Greece," he explained.

According to Najib, the country has strong economic fundamentals as evident
from the 10.1 per cent GDP growth in the first quarter of this year with all
economic sectors posting positive growth.

"The strong and overall growth was spurred by domestic demand and supported
by an improving external demand as well.

"At the same time, the country's competitiveness has also improved
significantly to 10th place from 18th last year, according to the IMD World
Competitiveness Yearbook 2010," he highlighted.
-- BERNAMA