MIER EXPECTS ECONOMY TO GROW 5.2 PER CENT THIS YEAR

KUALA LUMPUR, April 15 (Bernama) -- The Malaysian Institute of Economic
Research (MIER) has revised its gross domestic product (GDP) growth forecast for
the year from 3.7 per cent to 5.2 per cent, based on improving consumer and
business confidence.

The upward revision was also based on signs of a global economic recovery
and higher commodity prices, said its executive director Dr Zakariah Abdul
Rashid.

"Locally, the recent data on private consumption and export has shown an
improvement, especially in the last quarter 2009 and the first quarter this
year," he said at a press conference on the country's economic outlook here
Thursday.

The think tank also maintained its 5.0 per cent GDP growth rate for 2011.

MIER's Consumer Sentiment Index and Business Conditions Index were higher by
4.6 points and 5.2 points respectively quarter-on-quarter in the first quarter
this year.

All sector indices recorded modest gains in first quarter this year, with
the exception of Retail Trade Index and CEO Confidence Index.

Private consumption improved further by 1.7 per cent in fourth quarter last
year, producing a small growth of 0.8 per cent in 2009 supported by
strengthening consumer confidence and labour market prospects.

Zakariah said MIER expected private consumption to accelerate by 5.6 per
cent this year and a further 6.8 per cent in 2011.

Exports and imports of goods and services were expected to rise by 8.2 per
cent and 8.8 per cent respectively this year.

On a sector basis, MIER expects the agriculture sector to expand by 2.6 per
cent in 2010 and 2.2 per cent in 2011 on robust consumption of palm oil by
China, India and the Euro zone.

"The mining sector will grow by 5.4 per cent in 2010," Zakariah said.

The higher global demand for electronic chips will propel manufacturing
growth to 6.2 per cent, he said.

Zakariah said overall consumer price inflation was expected to grow by 2.2
per cent this year.

On the overnight policy rate (OPR), he said it was expected to settle at 2.7
per cent by end-2010 as core inflation had been raising faster than overall
inflation.

"Firmer economic expansion will further lift the OPR to 3.25 per cent next
year," he added.

-- BERNAMA



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