Among the measures announced are a cut in income tax, a 10% increase in wages for government employees, and a boost in spending on health, farming and education.

Finance Minister Daim Zainuddin said the budget was aimed at "strengthening the foundations for the achievement of economic growth and the wellbeing of the people".

"We have come a long way in moving our economy ahead, beyond the crisis," Mr Daim told MPs.

Out for votes

A packet of tissues bearing the image of Malaysia's prime minister

However, opposition politicians have condemned the package as a "feel-good" budget intended to win votes in what is expected to be an imminent general election.

A nationwide election must be held by June, but there is mounting speculation that one could be called as early as next month to take advantage of recent signs of economic recovery.

Correspondents say there are growing signs that Prime Minister Mahathir Mohamad is preparing to call a snap poll.

A range of publicity campaigns have emerged in recent weeks designed to raise the government's profile including, among others, the production of packets of tissues reminding Malaysians of the prime minister's achievements.

Glowing forecast

Mr Daim said the cut in income tax would amount to a 1% decrease across the board.

He said the budget world also include more than $1.3bn spending on infrastructure with the majority being aimed at reviving the fortunes of Malaysia's construction and road-building sectors.

He also gave a glowing forecast of Malaysia's economic prospects saying he expected real GDP to grow by 4.3% this year and 5% in the year 2000.

That would mean an end to Malaysia's deepest recession in four decades.

But the finance minister added that there should also be what he called "a paradigm shift" to move the engine of the Malaysian economy away from production and towards the knowledge-based sector.

However, opposition leader Lim Kit Siang said the budget offered little to assure investors that Malaysia's economy was more robust.

Corruption charges

He said there was no indication of a "fundamental change in the economic decision-making to ensure that vast sums of money are not used for mega-projects or to bail out government cronies".

Charges of official corruption and nepotism have become a major issue in Malaysian politics since the arrest of former Deputy Prime Minister Anwar Ibrahim in September last year.

Last week Mr Anwar, who is currently on trial for sodomy, accused several senior politicians, including Mr Daim, of corruption.