CITIBANK SAYS MALAYSIAN ECONOMY TO GROW BY 5 PCT IN 2011

KUALA LUMPUR, Jan 14 (Bernama) -- Malaysia's economy will grow by five per
cent in 2011 and 6.1 per cent in 2012, Steven Yong, Citibank's head of
investment strategies and research said Friday.

He also said the export sector is likely to soften and see a modest of four
per cent growth or lower in the first half of 2011, re-accelerating in the
second.

According to Yong, for 2010, it is estimated that Malaysia's economy would
have expanded by seven per cent, coming from a low base of growth in 2009.

He said recovery in the investment climate will be aided by the
implementation of Economic Transformation Programme (ETP) projects in 2011.

"A gradual recovery in foreign direct investment boosted by an improving
relationship with Singapore, should be positive for growth," he said at a press
conference on the 2011 Retail Investment outlook, here, Friday.

Similar to other analysts and research heads, Yong also expects Bank Negara
Malaysia (central bank) to increase interest rates by 50 basis point (bps) in
the second half of the year with 25 bps in July and another 25 bps towards
year-end.

Asked if a sharp correction awaits the equities market after the recent
rally, he said, from a fundamental point of view, such a move is not
anticipated.

However, external factors are something to watch for.

"If there is a sharp correction in major markets elsewhere, then there could
be a similar adjustment here," said Yong, who declined to put a timeframe for
it.

-- BERNAMA



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