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AWSJ: BNM Forecasts 5-6% Economic Growth
By Chris Prystay
30/3/2001 6:30 pm Fri
[Kadar pertumbuhan ekonomi diramalkan sekadar 5-6% sahaja, lebih
rendah dari kadar ramalan PM tahun lepas yang mendabik dada pandai
menguruskan ekonmi dan merasa tidak terjejas oleh kemelesetan di A.S.
Kerajaan lebih memberi fokus kepada pengguna berbelanja sedangkan ia
sepatutnya memberi penekanan di sebelah pembekal dan menurunkan kos.
Menurut analis, ringgit amat perlu di nilai semula jika tidak ia akan
terlebih nilai dan mengurangkan saingan. Rezab antarabangsa negara
telah susut sebanyak $5.5 bilion sejak 9 bulan lepas dan jika ia
terus menggelongsor, ringgit akan semakin tertekan.
Tetapi wang di dalam bank pula mahu digunakan untuk menampung kesusutan
tersebut. Soalnya wang siapa sebenarnya jika tidak kita sendiri yang
Malaysia Central Bank Forecasts
By CRIS PRYSTAY
KUALA LUMPUR, Malaysia -- Citing vulnerability to the economic
slowdown in the U.S. and Japan, Malaysia's central bank forecast that
the country's economy will grow by 5% to 6% this year, down from a
government estimate of 7% in October.
Malaysia Plans to Spend $789.5 Million to Soften Effects of U.S.
Economic Ills (March 28)
Malaysia Expects to Expand Budget by $394.7 Million for Poverty Work
"Growth will be affected by the less-than-encouraging global
conditions," said Zeti Akhtar Aziz, governor of Bank Negara, when she
released the central bank's annual report Wednesday. "But Malaysia has
the policy flexibility to respond to the slowdown. We have low
external debt," she said, and "we have a high rate of savings."
Tuesday, Prime Minister Mahathir Mohamed announced a three billion
ringgit ($789.5 million) fiscal stimulus package to mitigate the
impact on Malaysia of a slowing U.S. economy. Before the package was
announced, the central bank had projected that Malaysia's economy
would expand by 5% this year. But it now says the package could add
1.1 percentage points to the forecast. Economic growth last year was
Dr. Zeti Akhtar said the challenge for Malaysia is to sustain the
confidence of the private sector. "It wouldn't be prudent to allow
negative expectations to gather momentum and become self-fulfilling,"
she said in the annual report.
The October budget contained spending measures of 28.8 billion ringgit
to spur the domestic economy. The central bank predicts these measures
will push up private consumption by 7% this year, compared with 12%
growth in 2000. Private investment will rise by 9.2% in 2001, compared
with 27% last year.
The latest forecast still exceeds that of many private economists who
have scaled back their estimates in recent months. Pump priming, they
say, can only do so much for a small, export-oriented economy. "You
have to focus on [the] supply side, and on cost, and the most
important cost to Malaysia is the ringgit peg, which is now in danger
of being overvalued," said Vincent Low, an economist and fixed-income
strategist at Merrill Lynch.
Many private economists also worry that if Malaysia's international
reserves, which shrank by $5.5 billion in the nine months to February,
continue to fall, Kuala Lumpur's fixed-exchange rate of 3.80 ringgit
to the dollar will face further pressure.
Dr. Zeti Akhtar said the central bank remains undeterred. "We aren't
going to change the ringgit peg because of short-term developments,"
she said. The peg was introduced in September 1998 during the Asian
financial crisis to fend off currency speculators.
Malaysia had $29 billion in foreign reserves at the end of February,
which is sufficient to cover 6.3 times its short-term external debt,
and finance 4.3 months of imports. That's still higher than the low of
3.8 months for import coverage in 1997, a central-bank official said.
"Even if reserves are falling, we have mopped up 60 billion ringgit in
excess liquidity in the banking system; ... we can always put this
back into the system. So I don't think there will be any problems with
monetary policy," the official said.
Write to Cris Prystay at firstname.lastname@example.org
Selected economic indicators, percentage change
Source: Bank Negara Malaysia annual report