ECONOMY REMAINS TRICKY IN SECOND HALF 2010, SAYS INTER-PACIFIC

KUALA LUMPUR, July 1 (Bernama) -- Malaysia's economy outlook remains tricky
in the second half of 2010 although the first half macro indicators did shed
positive light, according to Inter-Pacific Research Sdn Bhd.

"Possibilities for the economic indicators to decelerate in the second half
of this year are high, likely to be dragged by the combination of domestic and
foreign issues," said the research house.

"Should the macro momentum start the wane in the second half of 2010, it
could pose headwinds for Asian markets during this period, including Malaysia,"
it said in a research note Thursday.

On the local front, Inter-Pacific said that focus will be on combination of
issues, with the centre of attention on policy execution of the 10th Malaysia
Plan and New Economic Model.

Policies related to economic reforms and crafting the economy to become high
income base economy are commendable but the critical issue is execution, it
said.

"Our past track record showed that the lack of willpower to implement the
structural changes remains the big drawback," said the research house.

On the global front, the risk of a possible double-dip global growth is
flaring, underpinned by euro debt crisis which could become a contagion issue
and slower-than-expected growth from China and India may result to a lack of
follow-through in consumer spending, Inter-Pacific said.

It also said that room for the ringgit to overshoot remained high,
projecting the ringgit to average at 3.20 in 2010 and 3.15 in 2011 against the
US dollar, mainly supported by 6.5 per cent gross domestic product (GDP) growth
in 2010 and 6.7 per cent in 2011.

"We can expect positive impetus to developing Asia's currency and equity
markets that include Malaysia," it added.

-- BERNAMA