ASIAN ECONOMIES IN A RESILIENT POSITION, SAYS ECONOMIST

KUALA LUMPUR, May 12 (Bernama) -- Asian economies including Malaysia are in
a resilient position, driven by government spending and improving exports.

Standard Chartered's Regional Head of Research for South East Asia, Tai Hui
said Asian investment level in Greece and other troubled countries within the
European Union countries was low.

The countries that are more vulnerable to the European crisis are
countries with high fiscal debt and low foreign exchange reserves, he said
during a media briefing Wednesday.

Many of the Asian investments in Europe are also in countries within the
Euro-zone which is not affected by the debt crisis, he said.

On Malaysia's economy, he said he was looking at a growth of 6.5 per cent
for the first quarter of this year and five per cent for the full year.

Tai also expects an announcement of another 25 basis increase in the
overnight policy rate tomorrow which would bring the OPR rate to 2.2 per cent.

He also expects the OPR to increase to 2.75 per cent for the full year.

As for budget deficit in Malaysia, he said it will likely be at six per cent
of gross domestic product this year.

He said the New Economic Model will also offer more opportunities in terms
of investment activities.

"However, it will also depend on implementation and whether the government
can get the support from the public."

On the ringgit, Tai said it will likely appreciate to 3.02 against the US
dollar by the end of this year, in line with the strengthening of other Asian
currencies.

"The situation in Europe now will not drag Asia into a recession as Europe
plays a limited role in the recovery of the Asian economy. The recovery in the
Asian economy six months ago was driven by domestic demand and trade within
Asia," Tai explained.

However, he also said there could be a contraction in lending from European
banks for emerging markets.

The positive news is US banks and Japanese banks are already making strong
recovery, Tai said.

He also expressed confidence that price of crude palm oil will go up with
the support of demand from China and India.

As for crude oil, he said it will likely remain volatile with an estimated
price average of US$88 per barrel by the end of this year.

--BERNAMA



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