‘Our beloved country is running the risk of bankruptcy if the behaviour of the governing leaders remains unchanged.'
An international banking group has forecast that Malaysia will hit the technical recession stage following a likely negative economic growth in the fourth quarter of 2008 and the first quarter of 2009.
Citigroup Global Market - the brokerage and securities arm of banking giant Citigroup - also downgraded Malaysia's gross domestic product (GDP) forecast for 2009 to 0.5 percent from 3.1 percent.
The government's official GDP forecast is 3.5 percent.
A technical recession means two consecutive quarters of negative economic growth.
According to a Bernama report, Citigroup Global Market delivered its forecast in a media briefing on Malaysia's market outlook for 2009 today.
The group was further reported as saying that there could be a cut between 50-75 basis point in overnight policy rate in the first quarter of 2009.
According to Citigroup, GDP for 2010 is estimated at 4.2 percent, while fiscal balance is forecast at -5 percent in 2009 and -4.5 percent in 2010.
GDP for quarter four 2008 is forecast at 2.0 percent.
The Citigroup's prediction came in the face of a robust outlook portrayed by Second Finance Minister Nor Mohamed Yakcop who was earlier reported as saying that the government was confident that the country would not be experiencing a technical recession this year.
He had said the country's economic growth was expected to stay positive during the period from January to June this year based on the equity of the financial system which exceeds 13 percent, total liquidity which is in billions of ringgit and the low non performing loan (NPL) rate which is at about 2.5 percent.
Penang seeks RM500 million Meanwhile, in a related economy development, Bernama also reported that the Penang government had sought a RM500 million allocation from the federal government for various programmes. The money would be used for, among others, retraining of workers and for the provision of business opportunities to the people of the state over the next two years. Chief Minister Lim Guan Eng said Deputy Prime Minister Najib Abdul Razak had agreed to channel the financial aid to the state government but had not stated the amount to be given. Najib is also the Finance Minister. "I met with Najib and he has agreed to provide the aid but he did not state the amount," he told reporters today. Lim said the application for financial assistance was made as part of the state government's preparation to face the adverse consequences of the current global economic downturn on workers in the state. He said the state government had reactivated the special committee on employment and retraining of workers to handle the negative impact of the global economic downturn on workers. "In the state government budget announced last year, we allocated RM10 million to implement various programmes to assist workers," he said.