MIER revises upwards growth outlook to 4.2pc
THE
Malaysian Institute of Economic Research (MIER) has revised upwards its growth
outlook this year, from 3.7 per cent to 4.2 per cent, on improving consumer and
business confidence levels in the first quarter.
Executive director Dr Zakariah Abdul Rasheed said improved production and sales numbers are expected to follow suit in the second quarter.
Apart from these indicators, the 10th Malaysia Plan spending and implementation of the Economic Transformation Programme (ETP) projects will prop up domestic demand in Malaysia this year.
"But we can't touch last year's 5.1 per cent growth this time round on account of continuing uncertainties in the global economy," he said when addressing the think tank's corporate economic briefing yesterday.
Executive director Dr Zakariah Abdul Rasheed said improved production and sales numbers are expected to follow suit in the second quarter.
Apart from these indicators, the 10th Malaysia Plan spending and implementation of the Economic Transformation Programme (ETP) projects will prop up domestic demand in Malaysia this year.
"But we can't touch last year's 5.1 per cent growth this time round on account of continuing uncertainties in the global economy," he said when addressing the think tank's corporate economic briefing yesterday.
Zakariah said structural
issues like high unemployment, continued deleveraging by banks and restrained
credit conditions continue to plague growth in the advanced economies, while
signs of a hard landing in China lurk.
MIER expects the economy to improve slightly to 4.7 per cent in 2013.
While all the major economic sectors are projected to register growth, the main growth driver to the gross domestic product (GDP) in 2012 is expected to be the services sector, which outpaced 2011's GDP with a 6.8 per cent growth.
In terms of percentage share of the GDP, domestic demand increased its lead over external demand in the fourth quarter of 2011, due to a huge increase in the level of public consumption.
"The upward trend of imports of consumption goods is again an indication of the rising importance of domestic demand in supporting domestic economic growth."
Latest data in February showed imports (of consumption goods) jumped 34.1 per cent, compared with 19 per cent in the previous month.
MIER also hopes that after the 13th general elections, there would be more aggressiveness and commitment to improve the structure so that Malaysia can move forward to deliver higher growth.
The fiscal deficit to the GDP must be looked into. "We need to have the Goods and Services Tax mechanism and subsidy rationalisation to reduce the current high level of operating expenditure."
The government is also facing pressures on the emoluments to its civil service, but Zakariah said that can only be addressed if the size of the public sector is cut.
It spent close to RM50 billion in emoluments in 2011, making up the bulk of the operating expenditure.
Challenges still remain ahead for the Malaysian economy as seen from the mixed results of its sectoral surveys during the first quarter of 2012.
The business conditions index and consumer sentiments index surged to 116.5 points and 114.3 points respectively. The residential property index rose to 123.7 points.
The automotive industry skidded to settle at 80 points during the first quarter, while the the tourism sector slipped slightly to 125.2 points.
MIER expects the economy to improve slightly to 4.7 per cent in 2013.
While all the major economic sectors are projected to register growth, the main growth driver to the gross domestic product (GDP) in 2012 is expected to be the services sector, which outpaced 2011's GDP with a 6.8 per cent growth.
In terms of percentage share of the GDP, domestic demand increased its lead over external demand in the fourth quarter of 2011, due to a huge increase in the level of public consumption.
"The upward trend of imports of consumption goods is again an indication of the rising importance of domestic demand in supporting domestic economic growth."
Latest data in February showed imports (of consumption goods) jumped 34.1 per cent, compared with 19 per cent in the previous month.
MIER also hopes that after the 13th general elections, there would be more aggressiveness and commitment to improve the structure so that Malaysia can move forward to deliver higher growth.
The fiscal deficit to the GDP must be looked into. "We need to have the Goods and Services Tax mechanism and subsidy rationalisation to reduce the current high level of operating expenditure."
The government is also facing pressures on the emoluments to its civil service, but Zakariah said that can only be addressed if the size of the public sector is cut.
It spent close to RM50 billion in emoluments in 2011, making up the bulk of the operating expenditure.
Challenges still remain ahead for the Malaysian economy as seen from the mixed results of its sectoral surveys during the first quarter of 2012.
The business conditions index and consumer sentiments index surged to 116.5 points and 114.3 points respectively. The residential property index rose to 123.7 points.
The automotive industry skidded to settle at 80 points during the first quarter, while the the tourism sector slipped slightly to 125.2 points.
Source : New Straits
Times
Date : 18 April 2012
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