No Plans For Third Stimulus Package, Says Najib

KUALA LUMPUR, July 1 (Bernama) -- There are no plans currently to introduce a third stimulus package as Malaysia wants to avoid incurring too high a fiscal deficit, Prime Minister Datuk Seri Najib Tun Razak said here, Wednesday.

The government has so far introduced two stimulus packages totalling RM67 billion.

Najib, who is also Finance Minister, said the second stimulus package worth RM60 billion unveiled in March this year was designed to cover a period of two years.

The first package valued at RM7 billion was introduced in November last year.

"I am trying to avoid a third stimulus package. There is a risk of that (higher fiscal deficit) happening if we introduce a third package."

"But if there are ways where we can further stimulate our economy, I am quite open to it if necessary. I am keeping a very close watch in terms of the fiscal deficit," he said during an interview with financial news television channel CNBC aired over Astro's channel 518 this morning.

He was responding to a question as to whether Malaysia would introduce a third stimulus package if the global economy and Malaysia encounters a downside later this year.

However, if there was a third package, the funds would have to be drawn from the liquidity in the market and not from the government's account, he said.

When asked whether there would be any further downgrade assessments in Malaysia's economic growth, Najib said it all depends on how these stimulus packages work.

"So, if the economic packages work well, then we (Malaysia) should be on track to achieve the contraction of four to five percent as we predicted," he said.

He said that in the second half of this year, the economy should see a step up in terms of the implementation (of the package) and the funds being disbursed.

The government had in May announced that the economy would contract by between -4.0 and -5.0 percent this year.

To another question, Najib said the government has no plans to internationalise the ringgit in view of the risks involved. "

We have learnt a painful lesson from the Asian Financial Crisis in 1997/98."

He said there was no demand for that (internationalising the ringgit) to happen because the ringgit was readily exchangeable anywhere.

"We do not want to manipulate the market in any way. Allow the ringgit to find its true value. That has been our policy and we will maintain our policy," he said.

The ringgit opened at 3.52 against the U.S. dollar this morning from 3.51 yesterday.