KUALA LUMPUR, Aug 4 ― Malaysia is not heading for economic recession as it still has strong economic fundamentals, including a low unemployment rate and growing income levels, economist Prof Emeritus Zakariah Abdul Rashid said today.

Zakariah, who heads think-tank Malaysian Institute for Economic Research (MIER), also cited Malaysia’s relatively large foreign reserves despite its recent depletion, noting that the country's economic growth remains robust albeit at a slower rate.

“Having said that, we have to be careful, fundamentals are rapidly eroded due to both external and internal forces, so something has to be done,” he told reporters here after MIER's 30th National Economic Briefing.

According to Zakariah, the government can ensure economic certainty by sticking to and carrying through reforms that have been introduced such as the Goods and Services Tax (GST), the scrapping of subsidies, minimum wage policy and policies to enhance competitiveness.

“Reforms are important because it will help the economy's resilience and the fruits will be long-term,” he said.

During the briefing, Zakariah noted various statistics on economic indicators, saying that the trade surplus balance went down as Malaysia's exports fell.

More Malaysians are venturing overseas at a greater rate compared to the foreign direct investments being pumped into the local economy here.

“Both BCI and CSI are below 100, we are in cautious mode, consumers are feeling low in spirit,” he also said, referring to Mier's survey findings for its Business Conditions Index and Consumer Sentiments Index for the second quarter this year.