The country’s banking sector is flushed with liquidity in excess of RM180bil, said Malaysian Economic Association immediate past president Datuk Dr Gan Khuan Poh.

He said unlike banks in the US and Europe, the Malaysian financial system was sound.

”The Malaysian economic growth will slow down but will not be in recession (during the current global economic meltdown) in light of the country’s strong economic resilence,” he said when presenting a paper at the Sarawak Business Summit.

Foreign diplomats were among those who attended the two-day event organised by Asean Strategy and Leadership Institute.

Dr Gan said the bailing out of banks and industries in the US had helped stablise the financial markets.

On the Malaysian economy, he said the country’s current monetary and fiscal flexibilities allowed for further measures, if necessary.

He said the country’s marcoeconomic fundamentals remained strong and that its past growth momentum was driven by domestic demand.

Also, its exports were diversified in terms of products and direction of trade.

”The high national savings (37% of gross national product) can be mobilised for domestic investment,” he added.