MALAYSIA UNLIKELY TO FACE DOUBLE-DIP RECESSION, SAYS ECONOMIST

By Santhia Thevi Panjanadan

KUALA LUMPUR, June 16 (Bernama) -- Malaysia is unlikely to face a double-dip
recession as the country has come out of a slow growth phase over the last few
years, according to an economist.

Dr Zainal Aznam, a member of the National Economic Advisory Council,
said with Malaysia becoming more integrated with Asia, continuous regional
growth would be an additional boost to the Malaysian economy.

"If Asian countries, particularly China and India, continue to develop, it
would be an additional boost for Malaysia's economic recovery. Anything that
boosts Asian growth will be good for Malaysia," he said.

In an interview with Bernama, Zainal said if Malaysia achieved its ambitious
target of 12.9 per cent growth in private investment under the 10th Malaysia
Plan or even less, this would enhance the growth rate and indirectly contribute
to the anticipated gross domestic product (GDP) of six per cent.

"The New Economy Model is even more optimistic. If you really follow the
prescription in the new growth model that encompasses a lot of liberalisation,
good governance and reducing the cost of business, that could add another half
percentage point to the GDP," he said.

On Malaysia's second-quarter GDP, Zainal expects it to be lower than the
first quarter.

The country registered a 10.1 per cent GDP growth in the first quarter this
year.

"The first quarter started from a low base when compared with the previous
quarter, as such giving a synthetic picture of a rapid jump in the growth rate,"
he said.

"So, in the second quarter, I'm expecting the GDP growth to be less than 10
per cent. I would be quite happy to see anything between six and eight per
cent."

Asked whether emerging markets could overshadow Malaysia in the pursuit to
achieve the forecast growth, Zainal said it was no secret that Malaysia and
other South-East Asian countries had lost out to China over the past eight to 10
years.

"Most of the foreign investments coming to Asia have gone to China.
Constraints that have dampened investor sentiment include the shortage of
well-trained human capital," he said.

"Investors claim lack of the right people and right number is a deterrent to
foreign investors setting up base in the country," Zainal said, adding that
high cost of doing business in Malaysia also drove foreign investors to look at
alternative locations.

"High regulatory cost and excessive regulations can drive investors away and
it was therefore imperative to improve the government delivery system," he said.

-- BERNAMA