KUALA LUMPUR, May 26 – Malaysia, Asia’s third most export dependent economy, expects growth to return in the third quarter of this year and will gradually open up its economy to boost long-term prospects, a top official said on Tuesday.
Malaysia will release first quarter gross domestic product data on Wednesday and economists in a Reuters poll expect it to show the economy shrank by 4 per cent from a year ago, the worst quarter since the 1998 Asian financial crisis.
Official forecasts see the economy shrinking just 1 per cent this year, a number that many private sector economists say is over-optimistic.
“We believe that for the third quarter we will continue in terms of recovery...because in the third and fourth quarters, the stimulus package impact will be felt. Next year we believe will be very positive in terms of growth,” the country’s Second Finance Minister Ahmad Husni Hanadzlah told journalists on the fringes of an economic conference. Malaysia’s government earlier this year unveiled a 60 billion ringgit ($17.21 billion) package of government spending and loan guarantees over two years to boost domestic demand.
It has also pledged to reform its economy, which is heavily dependent on oil and commodities exports and low-value-added electronics, produced by a low paid immigrant workforce.
Since taking office in April Prime Minister, Najib Razak has unveiled liberalisation measures on the country’s services sector and financial industry, although many of these measures were already planned as was his announcement that he aimed to boost services to 60 per cent of the economy.
The Malaysian Insider website (www.themalaysianinsider.com) said on Tuesday that Najib would scrap the country’s foreign investment committee, undertake some reforms of government-linked companies and establish new rules for private finance initiatives.
Husni declined to comment on the report but said that Malaysia was looking at liberalisation to attract investment.
“We are creating a new economic model which is still in the planning stage, eventually we will be opening up because we are party of the global system but it will be a gradual process,” he said. – Reuters
Show/Hide comments
Show/Hide comment form
