Bigger arsenal of stimulus required

One of the earliest in the region to cut rates in May, Malaysia has room for further cuts to its current overnight policy rate (OPR) of 3%.“Every 0.25% cut in the OPR can boost real private consumption growth by 0.3 percentage point, ’’ said Suhaimi Ilias, group chief economist, Maybank Investment Bank.

Countries adopting proactive strategies to boost their economies may require a larger arsenal to fight the possibly prolonged slowdown in trade, manufacturing and business investment globally.

Hit by continuous trade fights and deepening uncertainty, recession fears are back for the global economy, with some who consider it will not be as bad as in the 2008 financial crisis when interest rates were raised more aggressively.