(AFP) Malaysian manufacturers today welcomed the government's RM4.3 billion stimulus package but said long-term economic concerns also needed to be addressed.

The Federation of Malaysian Manufacturers said the package released yesterday would ensure the economy did not slow down too sharply in coming months and would restore some confidence to financial markets.

"The swiftness with which the government has responded is laudable given the need to boost domestic demand to cushion the impact of softening external demand," it said in a statement.

The federation urged the government to address long-term issues facing the economy such as strengthening competitiveness and attracting more foreign investment in the Oct 19 budget.

Prime Minister Mahathir Mohamad said yesterday the economy would grow by one to two percent this year compared to an earlier projection of five to six percent.

Monitoring mechanism needed

Of the total RM4.3 billion package, Mahathir said about RM2.5 billion would cover rural and urban development projects, construction, education, training and welfare.

Manufacturers said increased funding for development projects would spur growth but added the effectiveness of the stimulus package would hinge on the quick disbursement of funds and speedy implementation of projects.

"In this regard, manufacturers would like to emphasise the need for a monitoring mechanism to ensure the successful realisation of government's objective of boosting economic activities," he said.

They added the RM150 million allocated for the training of retrenched workers might be inadequate.