45,000 temp layoffs

KUALA LUMPUR - MALAYSIAN companies look set to put around 45,000 workers on a temporary layoff or short time work over a two- to three-week period around the Chinese New Year so as to cut output, a local newspaper quoted a government minister as saying.

'During the period, the factories will be on holiday for two to three weeks and workers have been asked to take leave.

Some are on paid leave, and some are on no-pay leave,' Human Resources Minister S Subramaniam was quoted as saying in the Sun newspaper.

According to the latest official data, Malaysia's unemployment rate stands at 3.3 per cent.

Malaysia is exposed to the global slowdown as it exports the equivalent of 100 per cent of gross domestic product and many private sector economists now say that the country will fall into its first recession in eight years in 2009.

The government remains optimistic that the economy will grow 3.5 percent this year however.

The government has already launched a US$2 billion (S$2.9 billion) stimulus package and leading economic thinktank Malaysian Institute of Economic Research (MIER), which last week cut its growth forecast for this year to 1.3 per cent from 3.4 per cent, said more would be needed.

It says that additional pump priming measures worth RM7 billion (S$2.9 billion) to RM10 billion, could be announced by mid-2009.

However, another defeat for the government in a by-election at the weekend signalled that electors were becoming restive and the government needs to take swifter action on the economy, according to a report from TA Securities on Monday.

'On the economic front, the government pump-priming measures need to be expedited (to boost) domestic expansion to cushion the damaging impact of faltering exports growth on an open economy like ours,' TA said.

'We are not only behind the curve in disbursing the allocation under the 9MP (ninth Malaysia Plan) but also the recently announced 7 billion Malaysian ringgit stimulus package,' it said. -- THOMSON REUTERS