Kuala Lumpur - Malaysia's opposition leader Anwar Ibrahim on Monday called for a major review of the country's budget for next year, saying the government was in a "state of denial" of the seriousness of the collapsing global financial system.

In his maiden speech in Parliament, Anwar said that the projected national income and economic growth as stated in the budget, which was announced in August, way off the mark of today's economic realities.

Earlier, Prime Minister Abdullah Ahmad Badawi denied fears that the country was slipping into a recession, saying that the Malaysian banking system was sound and not facing a liquidity crunch like banks in other countries.

"We still have strong economic fundamentals. We have very strong reserves. Our trade surplus is still strong. We do have high domestic savings," Abdullah said.

"We are not in any kind of (political) turmoil. We have a healthy democracy," he said.

The 208 billion ringgit (62 billion dollars) budget announced by Abdullah promises higher development spending.

However, Anwar said the government would be hard pressed to generate funds to make the budget work, and accused Abdullah of being in a state of denial and "sleeping in the daylight."

"We may or may not be heading toward a recession but we have to handle it, and we can't do that with a budget that is one-and-a-half months old," Anwar said.

Anwar, who has vowed to overthrow the government with parliamentary defections, says the opposition can produce a much better budget by cutting back multi-billion-dollar projects.

Abdullah, who recently handed over his Finance Ministry portfolio to his deputy Najib Razak, is scheduled to step down in March 2009, more than a year before his earlier targetted resignation date of June 2010.

The embattled premier has been facing mounting pressure to resign after he led the ruling coalition to major losses against Anwar's three-party coalition in general elections last March.

The opposition managed to deny the government of its two-thirds majority in Parliament for the first time in history, and also won five out of 13 states. (dpa)