KUALA LUMPUR - MALAYSIA plans to announce another economic stimulus package this year after last year's US$2 billion (S$4.9 billion) package, the country's Second Finance Minister said, according to a newspaper report on Thursday.

'The Prime Minister has given the directive to begin preparing another package,' Nor Mohamed Yakcop said in a television interview, according to the Star newspaper.

'We have the capacity to lend some more due to the fact that we have managed to reduce the budget deficit from 5.5 per cent of GDP (gross domestic product) in 2000 to 3.2 per cent in 2007,' he said.

Malaysia's government raised its 2009 fiscal deficit forecast in November to 4.8 per cent of GDP from 3.6 per cent. At that time, it also announced its first package to boost the economy, which it expects to grow 3.5 per cent this year.

Private forecasts for the country's economic growth in 2009 are more pessimistic, with UBS expecting no growth and CLSA forecasting a 1.2 per cent contraction. -- THOMSON REUTERS