Strong Investments Will Sustain Malaysia's Economic Growth - Economist

KUALA LUMPUR, July 25 (Bernama) -- Malaysia's economic growth is expected to sustain in the second half of the year on the back of strong global demand, said an economist. This is also based on the current grading by the International Monetary Fund (IMF) which raised the country's gross domestic product (GDP) forecast for this year to 4.8 per cent from 4.5 per cent previously. Sunway University's Business School Economics Professor Dr Yeah Kim Leng said in ensuring trade and exports growth, the private sector's sustainable investment in production capacity was important, particularly in the manufacturing and services sectors. "We have also seen strong investments in infrastructure, which is good, as it will have a multiplier effect on the country, although this might take time," he told reporters after a panel session at the 2017 IMF-BNM Summer Conference here, Tuesday. Yeah, a panellist at the event, said the immediate move to be taken by those sectors was to upgrade manufacturing capacities in terms of expanding volume and adopting higher technology with value-added and less labour intensive. This, he said, would help them to manage the rising cost of production and difficulty of securing foreign labour which has been a constant challenge. Meanwhile, International Monetary Fund (IMF) Research Deputy Director, Gian Maria Milesi-Ferretti said the 4.8 per cent projection was strong after taking into account the impressive first quarter performance of 2017. He said, among the key factors that led to the good performance in the first quarter was an increase in global activity, including in the region, which indirectly contributed positively to Malaysia. "Even though current oil prices are fluctuating, it is recovering slowly, but what's really helping stimulating Malaysia's current economic growth is the increase in global activity," he added. Milesi-Ferretti said that good monetary policy conditions and a fairly attractive environment for the private sector were also among the reasons luring investors to Malaysia. Earlier this month, Prime Minister Najib Razak said overall, the nation’s economic performance for the first quarter of 2017 remained stable and strong, expanding by 5.6 per cent, with foreign direct investments rising to US$3.97 billion (RM17 billion). The two-day BNM-IMF Summer Conference ends Wednesday. -- BERNAMA