THE main problem facing the Malaysian economy now is its shrinking export industry, which is hurting income and eventually domestic consumption, says Second Finance Minister Tan Sri Nor Mohamed Yakcop.
Exports have been falling for a while, he said, adding that orders are also drying up."Our major issues now are arising from this export pressure our exports total more than 100 per cent of our GDP (gross domestic product), while in Japan and most countries less than 30 per cent," he said.
Nor Mohamed said despite Malaysia's diversification efforts, such as increasing domestic consumption, "export is still important".
"And as exports shrink, it will affect the income of people and therefore consumption will be affected too," said Nor Mohamed to reporters after launching EonCap Islamic Bank's financing schemes in Kuala Lumpur yesterday.
This has prompted the government to constantly urge banks to continue lending."We also want to keep employment at a high level," he said.
On the upcoming announcement of the mini budget or second stimulus package on March 10, Nor Mohamed said it will be a comprehensive one.