OCBC BULLISH ON MALAYSIA'S GDP REBOUND

KUALA LUMPUR, March 26 (Bernama) -- OCBC Bank is optimistic that Malaysia's
gross domestic product (GDP) can rebound with 5.4 per cent growth this year and
5.0 per cent in 2011.

The bank's Head of Treasury Research and Strategy of Global Treasury Selena
Ling said the projection was based on the fairly encouraging economic indicators
especially exports, due to rising global demand for palm oil and
electronics.

"There is stronger confidence in the market now as the global economic
recovery is taking place. The GDP showed sharp rebound since the second half of
last year and the growth momentum will continue at least this year," she said.

Speaking at a press briefing on the 2010 economic outlook here Friday, she
said the Malaysian economy had weathered the global economic crisis better than
expected with a milder recession of -1.7 per cent last year.

"The official 2010 GDP growth forecast has been revised higher from the 2.3
per cent earlier presented in the November 2009 budget to 4.5-5.5 per cent,"
she said.

The worries would probably come only next year after most governments
including Malaysia withdrew their fiscal and monetary stimulus policies.

"Premature withdrawal of stimulus could decelerate the growth momentum from
the robust clip in the first half going into the second half of this year,"
Ling said.

Other headwinds included sovereign fiscal risks including Greece's and the
United States-China trade tension, she said.

She said eurozone leaders continued to blow hot and cold on the possibility
of extending aid to Greece and the Internatonal Monetary Fund was still seen as
the least preferred option at this juncture.

"The potential for contagion effects to other peripheral eurozone economies
cannot be fully discounted," she said.

She said that generally, double-dip risks were clearly fading with market
optimism growing about 2010 growth prospects in tandem with upgrades in both
private and public sector forecasts.

Inflation in the country should remain modest around 2.6 per cent given that
both the fuel subsidy cut and goods and services tax implementation had
been postponed.

"The labour market should also continue to improve with the unemployment
rate possibly dipping below the three per cent handle in the coming years," Ling
said.
-- BERNAMA