Recovery of economy expected next year, says Deputy Finance Minister

KUALA TERENGGANU: The country’s economy is expected to recover next year by recording a positive growth that will create employment opportunities, said Deputy Finance Minister Datuk Dr Awang Adek Hussin.

He said the confidence and projection hinged on the growth of the world economy as it was heading towards recovery.

“In the first and second quarters, the country’s economy had registered negative growth like the world’s economy.

“However, the contraction of the country’s economy at the end of the second quarter was smaller at 3.9% against between 6% and 7% in the previous quarter,” he told reporters after opening the Islamic College of Science and Technology’s second convocation here on Sunday.

Awang Adek said for Malaysia, the retrenchment experienced during the economic slowdown was a temporary experience.

“As the economy picks up, the investment will increase, definitely more jobs will be created. Retrenched workers will be rehired.

“The export earnings had declined by 20% but with factories resuming operations, they will re-employ the retrenched workers,” he said.

Awang Adek said most of the retrenched workers attended skill courses conducted by the Human Resources Ministry during the period of their unemployment.

A total of 568 students received diplomas in medical assistance, nursing, diagnostic radiography, psychology and syariah studies at the convocation.-Bernama

Deficit Manageable If Budget Well Structured - Dr Mahathir

PETALING JAYA, Oct 16 (Bernama) -- Former prime minister Tun Dr Mahathir Mohamad believes the government will be able to manage the budget deficit if the the budget is well-structured.

According to him, 7.6 per cent budget deficit is nothing new.

"The US budget deficit is 100 per cent but they can still manage it. As long as our budget is well structured, it is manageable," he told reporters after officiating the Menara Mustapha Kamal-PJ Trade Centre here on Friday.

The Malaysian Institute of Economic Research (MIER) has stated that Budget 2010 is expected to have a bigger deficit than the 7.6 per cent of gross domestic product (GDP) projected by the government.

Its executive director Datuk Dr Mohammed Ariff Abdul Kareem said the deficit was likely to exceed the projection because "this year's tax collection will fall short of the government's target".

According to him, the government will need to adjust its expenditure rather than make adjustment to revenue in order to contain the budget deficit.

"Having government revenue just barely enough to cover operating expenditure is a dangerous sign," he said.

On a hypothetical basis, Mohammed Ariff said the deficit could grow to 15.2 per cent in 2015 if the government was doing nothing to curb its expenditure.

As such, he lauded the government's intention to cut 15 per cent of its operating expenditure in 2010 even though he said "it could be a tall order to be done in one year".

-- BERNAMA

Economy will pick up next year but at the same time there will be a bigger budget deficit?

I don't know much about the economy or economics but I certainly know that those in business say that things are slow - business owners of retail shops say can see a lot of cars but no customers...