Malaysia unveils $4.7 billion stimulus, cuts growth forecast due to virus outbreak

Malaysia's Interim Prime Minister Mahathir Mohamad speaks during a news conference in Putrajaya, Malaysia, February 27, 2020. REUTERS/Lim Huey Teng

KUALA LUMPUR (Reuters) - Malaysia’s interim premier Mahathir Mohamad on Thursday unveiled a 20 billion ringgit ($4.7 billion) stimulus to counter the impact of the coronavirus outbreak, but lowered the country’s growth forecast and raised its fiscal deficit estimate.

The stimulus includes tax breaks and rescheduling of loans for companies affected by the virus outbreak, and cash aid for some, he said. State-linked companies and public agencies will also accelerate investment projects.

Mahathir, appointed caretaker prime minister after his ruling coalition collapsed this week, projected a growth range of 3.2% to 4.2% for this year. The government had previously estimated growth of 4.8%.

“I believe the economic stimulus package will enable the Malaysian economy to achieve the highest point of the range,” Mahathir said in a news conference. “In formulating the stimulus package, the government exercised prudence with respect to its fiscal position.”

He said the fiscal deficit is now estimated to rise to 3.4% from the original target of 3.2% of GDP.

($1 = 4.2350 ringgit)

Reporting by Rozanna Latiff, Mei Mei Chu and Liz Lee; Editing by Hugh Lawson