Zeti: Malaysia on track for 5%–6% GDP growth
KUALA LUMPUR: Malaysia is on track to achieve gross domestic product (GDP) growth of 5% to 6% this year, driven by strong domestic demand and investment inflows despite the current slowdown in China, Bank Negara governor Tan Sri Dr Zeti Akhtar Aziz said.
She said the central bank had already included the risk from global slowdown in the projection and that the current situation in China would not affect the GDP target for the whole year.
“These (global risks) are already priced into our forecast, but if it deteriorates further of course it will affect us,” she told reporters after presenting the Kijang Emas Scholarship to selected students in Kuala Lumpur yesterday.
However, she said should the global economy slow down significantly, the effect would not be as bad as previously due to the strength of the domestic demand and strong growth in investment.
Zeti said the country’s economy was still strong as investment was still taking place and consumption was steady at 6% to 7%.
“We face a lot of challenges that are happening in the global economy, in Europe, the US, the UK and Japan, which are important trading partners, but it is important for us to stay focused on the economy and keep going,” she said.
Asked on the expansionary fiscal policy highlighted by contesting parties in the upcoming general election, she said fiscal sustainability was very important and it needed to be accompanied by an increase in revenue.
Zeti also said fiscal policy needed to be targeted at areas that had the highest impact and ensured that everyone would receive the benefit.
Meanwhile, commenting on the strengthening ringgit, she said the rise of the local unit was due to the weakening of other currencies as well as good inflows of investment into the country.
“This is not unusual, we have seen it before. But what is more important is our foreign exchange market has been orderly.
“And also the financial system, the banking system in particular, bond market and capital market in general, has been able to intermediate these flows in an orderly manner,” Zeti said.
THe governor said the capability of the local market to absorb the volatility of the global economy was due to the liberalisation of the rules for foreign exchange transaction. — Bernama
Source : The Star
Date : 30 April 2013
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