Low interest rate among drivers of local economy
KUALA LUMPUR: Increased
revenue from the fast-growing tourism industry, a low interest rates scenario
and rising consumer confidence will remain major drivers for Malaysia’s growth.
This is despite the bleak outlook, particularly in Europe over the
next several years, from which export-oriented Asean economies might not be
spared.
These supportive factors will help Malaysia, which grew by 5.6%
last year, to maintain relatively commendable growth rates of 4.3% this year,
4.4 in 2014 and 4.6 in 2015.
“Malaysia will continue to
outperform the global economy which is good news,” said Mark Billington, the regional director of the Institute of Chartered Accountants in
England and Wales (ICAEW).
He said the low interest
rates in Malaysia was also supporting private sector investment and increasing
consumer confidence.
The country’s key interest
rate has remained at 3%.
“ The good news for Malaysia at the moment is that low inflation
means there is little pressure to raise interest rates, making investment
attractive,” he told Bernama.
“One key to attracting global investment will be in ensuring
transparency and global comparability in financial services, which in turn
underpins business and market confidence,” said Billington.
He said Malaysia was likely
to meet its aim of becoming a high income economy by 2020 but would have to
meet certain pre-requisites such as increasingly moving towards a knowledge and
skills-based economy and maximising the focus on service provision rather than
manufacturing.
“It also means attracting
global businesses” and making Malaysia a top investment and business location
through greater transparency, strong corporate governance as well as ease of
doing business.
“If Malaysia has the right
skills pool, it can become a global or regional economic hub” which means it
would compete with its close neighbours by attracting the right kind of talent
and industries.
“This means, being a competitive place to locate a business and an
attractive place for workers to re-locate to and build a career in,” he said,
adding that main barriers to Malaysia achieving its aspirations are the lack of
the right skills and knowledge in the workforce as well as bureaucracy.
“Growing the talent pool is not necessarily the problem as
Malaysia’s young people are bright, adaptable and hardworking. But what remains
the challenge is retaining what it currently has,” he added.
In this regard he said,
professionals, educational bodies, and businesses all need to work together.
“This is to ensure that young
people are not only trained with the right skills, but also given the option of
a rewarding career, to eventually choose to stay in Malaysia,” he added.
Billington highlighted that red tape is a barrier to investment -
both for local and foreign direct investments (FDIs)- and hence should be cut
at every opportunity.
“Tackling these barriers gives Malaysia its best shot at
attracting global businesses and investments that will support its aims,” he
added. — Bernama
Source : New
Straits Times
Date : 6
March 2013
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