ID :
154414
Wed, 12/22/2010 - 17:28
Auther :
Shortlink :
https://oananews.org//node/154414
The shortlink copeid
MALAYSIA NEEDS TO IMPLEMENT NEM EFFICIENTLY
KUALA LUMPUR, Dec 22 (Bernama) -- Malaysia needs to implement the New
Economic Model (NEM) efficiently to help it face the impact of the continued
global economic uncertainty next year, said RAM Holdings Bhd.
The rating agency has maintained the country's gross domestic product growth
at 5.4 per cent next year on the excitement generated under the Economic
Transformation Plan (ETP) roadmap, a key component of the NEM.
Its group chief economist, Dr Yeah Kim Leng, said Malaysia is still able to
register positive growth and in the face of any averse impact following its
pursuit of reform path under the NEM.
"It's a challenge. Next year we are embarking on a new transformation
journey that can set the pace for higher long-term growth," he told Bernama in
an interview here Wednesday.
Yeah said 2011 will be a challenging year as Malaysia moves to lay the
foundation of the path towards becoming a high-income economy via the ETP
roadmap as well as the Government Transformation Plan.
He said talking and discussions have to be replaced by action to enable the
country to sustain an economic growth of six per cent annually to become a
high-income nation by 2020.
"If there is no follow-through action, it will result in a loss of
confidence," he said.
As the government has set its expectations, Yeah said, the delivery and
implementation will be closely watched next year as they will set the tone for
the rest of the decades.
"If the delivery is not up to the mark, it may draw unfavourable reactions
from investors and they will not put Malaysia on their radars anymore," he said.
Yeah said despite the strong domestic demand and improving consumer and
business sentiments, the key challenge is to sustain the confidence and outlook
in terms of stable employment and income growth.
Besides focusing on the economy, he said, attention may shift to the
possibility of a snap election as the economic conditions are favourable.
"The conditions are actually quite conducive for the present administration
hold a snap election to seek a new mandate to undertake the restructure/reform
and achieve the vision under the NEM," he said.
On the private sector, Yeah said companies will be challenged to find ways
to sustain growth and look for new opportunities, especially those created under
Budget 2011, 10th Malaysia Plan and ETP.
He said the government's focus on energising the private sector will help
sustain the growth of domestic demand.
"The private sector is more encouraged with the appropriate policy
environment and incentives to invest in Malaysia," he said.
On the negative side, Yeah said, Malaysia has to recognise the continued
weak growth in advanced economies, particularly in the US and Europe.
"I think that will persist for the next few years," he said.
Yeah said Malaysia has to depend on large emerging economies like China,
India, Brazil and Russia.
He said although exports are likely to be soften, the domestic demand will
be sufficiently robust to ensure Malaysia's growth is on uptrend next year.
Yeah said inflation next year is likely to be at 2.5 per cent from -2 per
cent in 2010 largely because of the subsidy rationalisation.
"Domestic demand will remain robust next year in line with overall economic
conditions due to a steady income growth and employment, strong credit flows and
no cutbacks in government spending," he said.
He said public spending will continue on projects under the ETP which will
start next year.
Yeah said the key challenge now is to manage the 'hot money'.
"Leverage on these inflows to finance our long-term projects.
"If we can demonstrate that Malaysian growth prospects for the next few
years are strong and sustainable, they will likely remain," he said.
On the ringgit, Dr Yeah said it is likely to breach 3.00 against the US
dollar by the middle of next year in tandem with other Asian currencies which
will also continue to rise, albeit at a gradual basis.
Meanwhile, Affin Investment Bank head of retail research, Dr Nazri Khan,
expected the GDP to grow at five per cent for next year largely due to external
factors which will dampen exports.
"Overall, we believe the economy is expected to slow down until first half
of next year and may pick up in the second half," he said.
He said the early concern will be inflation as the US is exporting it.
"By printing dollar, you can see 'hot money' coming into commodities.
"It is not alarming yet but they are moving fast," he said.
Nazri said any inflation will likely be cost-push.
"I see more downside risk next year compared to upside risk," he said.
Nazri said the ringgit is likely to reach 3.00 against the US dollar by the
first half of next year amid the weakening greenback due to dollar printing
which will further de-value the currency.
He said a stronger ringgit will enable Malaysians to consume cheaper
imported products and mitigate income gap between Malaysia and abroad, which
indirectly will attract local professionals working abroad to come home.
Economic Model (NEM) efficiently to help it face the impact of the continued
global economic uncertainty next year, said RAM Holdings Bhd.
The rating agency has maintained the country's gross domestic product growth
at 5.4 per cent next year on the excitement generated under the Economic
Transformation Plan (ETP) roadmap, a key component of the NEM.
Its group chief economist, Dr Yeah Kim Leng, said Malaysia is still able to
register positive growth and in the face of any averse impact following its
pursuit of reform path under the NEM.
"It's a challenge. Next year we are embarking on a new transformation
journey that can set the pace for higher long-term growth," he told Bernama in
an interview here Wednesday.
Yeah said 2011 will be a challenging year as Malaysia moves to lay the
foundation of the path towards becoming a high-income economy via the ETP
roadmap as well as the Government Transformation Plan.
He said talking and discussions have to be replaced by action to enable the
country to sustain an economic growth of six per cent annually to become a
high-income nation by 2020.
"If there is no follow-through action, it will result in a loss of
confidence," he said.
As the government has set its expectations, Yeah said, the delivery and
implementation will be closely watched next year as they will set the tone for
the rest of the decades.
"If the delivery is not up to the mark, it may draw unfavourable reactions
from investors and they will not put Malaysia on their radars anymore," he said.
Yeah said despite the strong domestic demand and improving consumer and
business sentiments, the key challenge is to sustain the confidence and outlook
in terms of stable employment and income growth.
Besides focusing on the economy, he said, attention may shift to the
possibility of a snap election as the economic conditions are favourable.
"The conditions are actually quite conducive for the present administration
hold a snap election to seek a new mandate to undertake the restructure/reform
and achieve the vision under the NEM," he said.
On the private sector, Yeah said companies will be challenged to find ways
to sustain growth and look for new opportunities, especially those created under
Budget 2011, 10th Malaysia Plan and ETP.
He said the government's focus on energising the private sector will help
sustain the growth of domestic demand.
"The private sector is more encouraged with the appropriate policy
environment and incentives to invest in Malaysia," he said.
On the negative side, Yeah said, Malaysia has to recognise the continued
weak growth in advanced economies, particularly in the US and Europe.
"I think that will persist for the next few years," he said.
Yeah said Malaysia has to depend on large emerging economies like China,
India, Brazil and Russia.
He said although exports are likely to be soften, the domestic demand will
be sufficiently robust to ensure Malaysia's growth is on uptrend next year.
Yeah said inflation next year is likely to be at 2.5 per cent from -2 per
cent in 2010 largely because of the subsidy rationalisation.
"Domestic demand will remain robust next year in line with overall economic
conditions due to a steady income growth and employment, strong credit flows and
no cutbacks in government spending," he said.
He said public spending will continue on projects under the ETP which will
start next year.
Yeah said the key challenge now is to manage the 'hot money'.
"Leverage on these inflows to finance our long-term projects.
"If we can demonstrate that Malaysian growth prospects for the next few
years are strong and sustainable, they will likely remain," he said.
On the ringgit, Dr Yeah said it is likely to breach 3.00 against the US
dollar by the middle of next year in tandem with other Asian currencies which
will also continue to rise, albeit at a gradual basis.
Meanwhile, Affin Investment Bank head of retail research, Dr Nazri Khan,
expected the GDP to grow at five per cent for next year largely due to external
factors which will dampen exports.
"Overall, we believe the economy is expected to slow down until first half
of next year and may pick up in the second half," he said.
He said the early concern will be inflation as the US is exporting it.
"By printing dollar, you can see 'hot money' coming into commodities.
"It is not alarming yet but they are moving fast," he said.
Nazri said any inflation will likely be cost-push.
"I see more downside risk next year compared to upside risk," he said.
Nazri said the ringgit is likely to reach 3.00 against the US dollar by the
first half of next year amid the weakening greenback due to dollar printing
which will further de-value the currency.
He said a stronger ringgit will enable Malaysians to consume cheaper
imported products and mitigate income gap between Malaysia and abroad, which
indirectly will attract local professionals working abroad to come home.
