GDP FORECAST FOR 2009 MAY BE REVIEWED, SAYS M'SIAN DPM

KUALA LUMPUR, Feb 17 (Bernama) -- Malaysia's gross domestic product
(GDP)forecast for 2009 would be reviewed if there is a big possibility of demand
for the country's exports being badly affected and deteriorates to double digit
figures, said Deputy Prime Minister Najib Razak Tuesday.

Najib said this following a slowing in world trade and growth which may
become more signifcant if the stimulus packages around the world did not bring
about the much envisaged positive benefits.

Najib, who is also the Minister of Finance, said that the new GDP forecast
to be announced, would consider the strength and the country's edge in handling
the uncertain external environment.

"In view of the increasingly challenging international environment and as an
open economy, Malaysia is also expected to face the effects of the slowing
economy and world trade," he told the Lower House of Parliament.

He also said,economic indicators showed that the country at present faced
challenging risks such as those faced by all countries in the world.

"This development is expected to continue this year and will impact the
country's economic activities throughout it," he said.

Among the key economic indicators are that the country's exports experienced
a fall of -2.6 percent in October last year, -4.9 (November) and -14.9
(December).

For the same period, the industrial production index (IPI)also deteriorated
when October recorded a -2.8 percent, November (-8.2 percent) and December (15.5
percent).

Najib said job cuts from October 2008 to January 2009 totalled
10,277 and 4,207 under the voluntary separation scheme for the same period.

He added that the country's share market was still at a low level of 903.52
points on Feb 10 compared to a high of 1,519.22 points on Jan 11 last year.

However, Najib said that Malaysia still possesed strong economic
fundamentals for resilience and growth.

Among these are international reserves which increased to US$91.3 billion on
last Jan 30 and which can sustain 7.5 months of retained imports.

He said the country's banking system was also strong with the risk-weighted
capital ratio (RWCR) at a high level of 12.6 percent in December 2008,surpassing
the Basel International Standard.

Also, the country had a high degree of competitiveness, especially in
Ismalic banking and the country's financial system was not too exposed to the
global economic crisis, he explained.

Najib added that, the level of unpaid debts was also low at 2.2 percent.

"The inflation rate is also projected to be stable.It is expected to rise at
a low rate in 2009," said Najib.

The level of the national gross savings remained at a high level of 37
percent of the GDP in 2008,he said.

"This situation provides an advantage and flexibility to the country to
harness more available resources to support private sector activities and the
country's economic growth as a whole," he said.

Najib also stated that specific details of the second stimulus package would
be tabled on March 10 and it would be bigger and more comprehensive from the
first announced last November.

"In the meantime, we are exploring and considering the additional needs of
small medium enteprises to be included in the second package," he said.

He added that, the government will also take into consideration, those
projects needed for both urban and rural areas in the second stimulus package.

"With the implementation of the first and second stimulus packages, the
government with the full support of all concerned, including the private sector
and the people, is confident of avoiding experiencing the economic downturn," he
said.
-- BERNAMA