Malaysia announces steps to improve economy in 2015

KUALA LUMPUR, Jan 21 (Xinhua): The Malaysian government announced a number of proactive measures Tuesday to handle the changing economic scenario caused by the oil price slump and the worst flood in the country.

In a special address to the nation, Prime Minister Najib Razak said the government remained confident that the country's gross domestic product (GDP) will grow by between 4.5 per cent to 5.5 per cent in 2015.

Economists here believed that Malaysia's GDP growth will slow down to 5.0 per cent this year against 5.7 per cent in 2014 as exports of crude oil and palm oil makes much contributions to the nation's economy.

Announcing the revisions to the 2015 which was tabled in October 2014 , Najib said the Budget for 2015 that was announced when crude oil price was hovering above US$110 per barrel is no longer realistic.

He said the falling oil price necessitated a review of fiscal assumptions underpinning the 2015 Budget, with the revised forecast predicting a revenue shortfall of RM 13.8 billion (about $3.94 billion), or 3.2 per cent of GDP in 2015 from 3.0 per cent projected earlier.

Najib set out a strategy to counter external developments and strengthen Malaysia's economic resilience by continuing fiscal reform and consolidation, assisting people and businesses affected by recent floods.

Firstly, to boost exports of goods and services, the government will promote import-substitution services, such as shipping, port, education and professional services and promote tourism.

Secondly, to enhance private consumption, the government will give priority to local contractors to undertake reconstruction works in their respective flood affected areas and intensify promotion of "Buy Malaysia" products.