The Malaysian economy will not plunge into recession though it too feels the ripple effects of the global economic turmoil, Second Finance Minister Tan Sri Nor Mohamed Yakcop said today.

He said the country would be able to overcome the challenges as the goverment had taken immediate measures to channel the RM7 billion stimulus package.

“The Malaysian economy is still strong although many big countries are experiencing a recession and economic contraction, among them are United States and European countries.

“Even Singapore’s economy has also contracted two percent,” he told reporters after opening a food processing zone in Teluk Air Tawar here.

He said the Malaysian economic stability was also supported by the high banking liquidity and private sector confidence.

Nor Mohamed said the government had started to disburse the RM7 billion package to all ministries several days ago to get projects which could be implemented immediately off the ground.

“We want all the allocations to be used this year with the focus on instant projects such as bridge repairs and construction, the restoration of buildings and to resurface roads in bad shape.

“We do not want the money to used for big projects which will take too long to be completed and slowdown the market cycle,” he said.

He said if the private sector confidence trended downward, the government would inject more funds into the market.

Two crucial elements to be attended to in tackling the effects of the economic turmoil were credit level and job opportunities, he said.

“We will make sure banks give out loans to eligible applicants and any banks which turn down loan applications for good projects will be made to explain,” Nor Mohamed said.