Malaysian Prime Minister Najib Razak has unveiled a US$72 billion plan to revive slowing economic growth amid a collapse in oil prices and attacks from political rivals over a troubled development fund.
Najib said Thursday his five-year plan would boost economic growth to 5-6 percent annually over the next five years by creating higher-paying jobs and attracting investment in sectors such as green technology and public infrastructure, The Wall Street Journal reported.
The previous five-year plan fell short of its target of 6 percent annual growth in each year except 2014.
“We foresee greater volatility and uncertainty in the global economy as a result of the decline in oil prices, realignment of exchange rates, as well as geopolitical risks,” Najib said.
Malaysia’s long-running fiscal deficits have limited government spending.
Credit-rating firms have criticized the country’s dependence on petroleum revenue to fill government coffers.
Fitch Ratings cautioned that Malaysia is more likely than not to be downgraded by next month.
Economists reacted to Najib’s plan cautiously.
“The plan announced is not overly ambitious,” said Brian Tan, a Singapore-based economist at Nomura Holdings Inc.
“But let’s see how they do it in [the] current economic and political climate.”
Najib’s latest economic plan comes as criticism mounts over his handling of 1Malaysia Development Bhd, a state investment fund that he chairs.
A still-influential former prime minister, Mahathir Mohamad, has publicly called for his resignation over 1MDB, which is facing a cash crunch after racking up more than US$11 billion in debt.
Najib had previously dismissed concerns about 1MDB, noting that its assets exceeded its liabilities, but on Tuesday he said a “recovery plan” is being put in place to “save” the fund.
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