Malaysia will not slip into a recession this year, a government official said, as he urged the nation's banks to keep offering loans to small and mid-sized businesses to maintain private sector confidence, news reports said Sunday. The impact of the global financial downturn will be softened by government measures, including a plan to inject 7 billion ringgit ($2 billion) into the economy, Junior Finance Minister Nor Mohamed Yakcop was quoted as saying. “The Malaysian economy is still strong although many big countries are experiencing a recession and economic contraction,” Mohamed said, according to The Star newspaper. Government authorities have forecast that Malaysia's economy will expand by 3.5 percent in 2009, but some economists have warned that growth could fall below 2 percent. Nor Mohamed stressed that banks must play their part to maintain private sector confidence, saying his ministry has received complaints that some financial institutions were rejecting viable loan applications. “Banks and financial institutions have been warned not to be tightfisted when giving out loans to small-and-medium-scale enterprises,” Nor Mohamed was quoted as saying.
