Economic Stimulant

How much Malaysia needs for a stimulus package

1. Is 40 billion ringgit in increased spending sufficient to avert a recession?

2. Deputy Prime Minister Najib Razak will introduce a "mini-budget" in Parliament on March 10 to boost the economy. This is expected to be between 10 billion ringgit and 15 billion ringgit .

Note, there was a 7 billion ringgit stimulus package unveiled in November 2008.

3. Widely expected though that it may be insufficient to prevent the economy from slipping into negative growth this year. The manufacturing slump is expected to continue until September, which will hit the export-driven economy.

4. The increased public spending is in the right direction, that more money should be injected into Malaysia's system, especially at a time when external demand has gone down and rising unemployment is impacting domestic demand.

5. As we e are facing real threats of recession, Malaysia needs at least 40 billion ringgit in total or 5 percent of GDP. The measures should not only be aimed at low-income group but also middle-income groups.

6. Note that United States is spending $1.5 trillion or 11 percent of gross domestic product, China $586 billion or 16 percent of GDP and Singapore $13.8 billion or 10.7 percent of GDP.

7. Some even suggested that 2008 should be a tax-free year to ease the people's burden and give cash or introduce a cash-bonus system for middle and low-income workers, families with school-going children, and farmers.

8. The government has slashed its 2009 growth forecast to 3.5 percent, from 5 percent. Is recession here already?