PUTRAJAYA: Malaysia is not facing an economic crisis nor a technical recession, Prime Minister Datuk Seri Najib Tun Razak said today.

This is because Malaysia was not the only country that is experiencing economic challenges as other countries are also facing these challenges, he said.

"This trend proves that we are not alone in facing the global economic challenges. Other countries too are affected by the current economic uncertainties," he said.

For 2016, the global economy is expected to be more challenging. The latest data by the International Monetary Fund indicates that the global economy will grow at a slower pace from 3.6 per cent to 3.4 per cent.

World trade is anticipated to moderate from 4.1 per cent 3.4 per cent. This is on account of several economies such as South Africa, the United States, Brazil and China which are also expected to expand as a slower pace.

"Considering the current economic scenario, the government has made a decision to revise the gross domestic product (GDP) growth projection for 2016 to 4.0 per cent to 4.5 per cent and assuming the Brent crude oil price at US$30 to US$35 per barrel," he said.

He further said the global crude oil prices continued to plummet to US$30 per barrel. As of yesterday, the price of Dated Brent crude oil dropped to US$31 a barrel, a reduction of 35 per cent compared with the assumption of US$48 during the tabling of Budget 2016.

These developments have a significant impact on the country's revenue. The economies of oil producing countries have also been adversely affected, said Najib who is also Finance Minister.

Furthermore, the US dollar continues to strengthen compared with other currencies. Among the currencies affected are the Brazilian real (-23.2 per cent), Chinese renminbi (-5.7 per cent), Canadian dollar (-11.3 per cent), Russian ruble (-29.3 per cent) and Singapore dollar (-5.6 per cent).

Meanwhile, the ringgit had depreciated by 11.3 per cent against the US dollar, from 3.77 in June 2015 to 4.25 as at Jan 27, 2016.

In fact, the ringgit is undervalued and does not reflect the true economic fundamentals.

"However, the ringgit is expected to better reflect the strength of the economic fundamentals when global financial markets stabilise and oil prices recover to reasonable levels," he said.

Among the initiatives announced today by the Prime Minister were a special tax relief of RM2,000 to individual taxpayers with a monthly income of RM8,000 and below for the 2015 year of assessment and three per cent cut in employees contribution to the Employees Provident Fund.

Additionally, Najib also announced that Malaysia External Trade Development Corporation and SME Corporation Malaysia will intensify the mid-tier and Go-Export programmes in order to penetrate international markets, besides encouraging government-linked companies to implement initiatives to narrow the income gap gradually between the higher management and employees.

As for infrastructure and development projects, key projects namely mass rapid transit, light rail transit, Pan-Borneo Highway, Malaysian Vision Valley, Cyber City Centre, Refinery and Petrochemical Integrated Project in Pengerang, Johor, and high speed rail will be continued.

"Indeed, these initiatives are very important to ensure a sustainable economic growth, and more importantly, to safeguard the wellbeing of the rakyat. I am confident that together we can overcome these difficult challenges again," he said.

"We have done it before...God willing, we can do it again," he said.

-- Bernama