The economic stimulus measures announced by the Prime Minister today to stabilise the financial markets and support business activities are applauded.The measures outlined are well-balanced between supporting the financial market with the RM20bn capital injection into ValueCap to buy the undervalued shares and measures to support real economic activities, e.g. incentives for manufacturers, the SMEs and tourism activities.
The country’s economic growth is already envisaged to be well above the lower end of the official target of 4.5% for this year even with the headwinds emanating from low commodity prices, sharp weakening in Ringgit, China’s economic slowdown and the uncertainties on the global front. Hence, we are confident that if all the measures announced are executed well, growth could actually be closer to the upper end of the official target of 5.5% although there may be some time lag before we can see the full positive effects working through the financial and capital markets and in turn, the real economy.
We also welcome the government’s continuous commitment in consolidating its fiscal account and its efforts to contain the deficit target of 3.2% of GDP for this year. We look forward to more constructive measures to be announced in Budget 2016 to bolster economic growth.Tengku Dato’ Zafrul Aziz, Group Chief Executive of CIMB Group