Malaysians told to brace for tough times

Although not in recession, Malaysia must nevertheless steel itself for tougher times as the world economy continues its downward spiral, Prime Minister Datuk Seri Abdullah Ahmad Badawi said.

He said the domestic economy, with its strong fundamentals, would be able to ride out the crisis in credit and stock markets worldwide.

Speaking after a keynote address at the US-Islamic World Regional Forum here, Abdullah repeated his assurances of the economy's resilience but cautioned that the way forward would not be smooth.

"God willing, we are not going into a recession. We have strong reserves, a good trade surplus, our savings are high and our currency is stable, so I think we will be able to withstand the shockwaves of the crisis.

"Asian and European stock markets rallied yesterday as the Group of Seven rich countries and 15 European Union leaders moved to salvage their beleaguered banks.

"We have the strength and resilience as we have faced this before and our banking system is strong. There's stability in the country and predictability in terms what's going to develop politically. We are not in turmoil, but I am not saying that it will be easy.

"It is going to be tough, but if the rakyat stand united behind the government and if we can work with a private sector that acts as one, we can weather the storm.

"He said there was no plan to peg the ringgit or to inject funds into the flagging local bourse.He acknowledged that the panic that gripped stock markets worldwide last week would affect Malaysia but said its impact would be limited.

"A little bit of damage, but we'll be okay." Abdullah was responding to a question on Malaysia's economic situation as countries such as Singapore, the United States, Britain and other developed countries slide into negative growth.