The government will have to cut its 3.5 percent growth forecast for 2009 if the decline in the country's exports hits double digits, Finance Minister Najib Abdul Razak said today.

najib announce new bn perak state govt 040209 04"In view of the increasingly challenging international environment and as an open economy, Malaysia is also expected to face the effects of the slowing economy and world trade," he told the Dewan Rakyat.

"This development is expected to continue this year and will impact the country's economic activities throughout it," added Najib, who is also deputy premier and is expected to be appointed prime minister next month.

Najib was responding to a question by Kapit MP Alexander Nanta Linggi on the measures taken by the government to avert or minimise the effects of the global financial meltdown and recession.

"This trend begun in Oct 2008, when key economic trends such as national exports dropped at -2.6 percent and then -4.9 in November and -14.9 percent in December.

"Besides that, the Industrial Production Index (IPI) also fell to -2.8 in Oct, -8.2 in Nov and -15.5 percent in Dec," he said.

No details on mini-budget

Najib also said that retrenchments from Oct 2008 to Jan 2009 was at 11,595 while the number of those retrenched under voluntary separation schemes in that period was 2,752.

He however refused to reveal the details of the mini-budget which is due to be tabled on March 10 but he added that "it would be more than the first stimulus package."

Malaysia's exports have been declining in recent months, with a 2.6 percent fall in October followed by a 4.9 percent drop in November and a steep 14.9 percent slid in December.

An influential think-tank has already slashed its 2009 economic growth forecast to 1.3 percent.

Malaysia last year unveiled a RM2 billion stimulus package and Najib said that a second package to be tabled on March 10 would be bigger and more comprehensive.