KUALA LUMPUR (Jan 8): The government acknowledges the challenges faced by local businesses amid the current economic slowdown, Economic Affairs Minister Datuk Seri Mohamed Azmin Ali said today.

"Yes, for local [businesses] there are some issues. They need the government to create more economic activities so that they have the opportunities," Azmin said.

"Again we have already explained that our debt is huge, but certainly we are not going to stop the development in Malaysia, because that will impact the growth of our economy," he added.

Azmin was speaking to reporters at the official opening of the American Malaysian Chamber of Commerce's new office in Kuala Lumpur.

The minister said that despite the recent reviews of mega projects by the government, "people-oriented" projects such as hospitals, roads, water supply and electricity works would be continued.

"What was done in the last few months was to review all these mega projects because [in the past] the process was not as transparent, but projects for the rakyat, that are people oriented, we will continue," he said.

A report released by RAM Holdings Bhd yesterday noted that business confidence among local businesses had fallen to its lowest levels since the index began tracking in 2017.

According to the RAM Business Confidence Index report, one of the main factors driving the weak sentiment for the first six months of 2019 is the weak economic prospects.

Azmin said that while there challenges on the domestic front, Malaysia's foreign direct investment has grown since the general election last May.

"We believe in terms of numbers, in terms of volume and trade investment and based on our engagement with chambers and foreign diplomats that represent their communities here, they are very confident that the new government has taken a clear direction to improve our economy," he said.