No recession for Malaysia: Mahathir

No recession for Malaysia: Mahathir

KUALA LUMPUR (AFP): Malaysia is not expected to plunge into
another recession this year despite the U.S. slowdown, Prime
Minister Mahathir Mohamad said on Monday.

He told a press conference that "as far as we can read, the
figures do not show that we are going into recession."

The premier said Malaysia's economy was "much more
diversified" than that of neighbouring Singapore, which entered a
technical recession after reporting two consecutive three month
periods of quarter-on-quarter decline.

"We don't depend entirely on the electronics industry. We have
palm oil, we have also some services, we have a lot of
fabrication companies.

"We have quite a lot of other businesses, so we will not be as
much affected as Singapore is because of the downturn in the
electronics industry..." Mahathir said.

Malaysia last plunged into a recession in 1998 but has since
rebounded. It is however feeling the effects of the U.S.
slowdown, as almost 21 percent of its exports go to the United
States.

The government in March revised downwards its economic growth
forecast this year to between five and six percent, from seven
percent previously. But most analysts predict the economy will
grow by less than half the 8.5 percent rate of last year.

Mahathir said the budget for 2002, to be tabled in parliament
in October, would continue to be in deficit for the fifth year in
a row.

"It won't be a very big deficit but we do have the money...
companies are making good profits despite the downturn... the
government expect to collect quite a lot of corporate tax, income
tax revenue," he said.

Malaysia would still have sufficient funds to pump-prime the
economy even if the government reduces import duty on goods, he
added.

The budget for 2001 unveiled last year forecast an overall
deficit of 16.14 billion ringgit (4.25 billion dollars), or 4.9
percent of gross national product.

Mahathir, who is also acting finance minister following Daim
Zainuddin's resignation on June 1, said he was still looking for
a suitable candidate to replace Daim.

"I have been looking around (but) still no applicant. Some
have actually applied but I have not considered (them) yet," he
added.