Malaysian Economy Firmly On Steady Growth Path

KUALA LUMPUR (Bernama) -- The Malaysian economy is firmly on a
steady growth path to sustain 5-6 per cent growth in the future, said Bank
Negara Malaysia (BNM) governor, Dr Zeti Akhtar Aziz.

Zeti said this was because Malaysia has the fundamentals and economic
flexibility to adjust, go into new areas of economic activity and enhance the
new areas of comparative advantage in manufacturing and services sector to move
to the higher end of economic growth.

The central bank has forecast a growth of 5-6 per cent for Malaysia this
year with stronger growth in the second half and a modest one in the first half.

"The growth forecast has already priced in oil prices of US$90-US$100 per
barrel," she said.

She said this at a media briefing in conjunction with the release of BNM
Annual Report 2010 and Financial Stability and Payment Systems Report 2010 here
Wednesday.

On whether the six per cent sustained gross domestic product (GDP) growth
target could be achieved, she said: "This path, in our assessment, can be
achieved going forward into the future with a growth of five to six per cent."

Zeti said the inflation forecast at 2.5-3.5 per cent in 2011 was worrying.

"The situation, however, is manageable and we have taken into account these
levels. The growth projections have already taken into account the impact it may
have on consumption."

Zeti said it was important to have an environment of macroeconomic stability
in order to achieve a six per cent growth for the next 10 years.

"Otherwise, there will be high inflation and high growth for one or two
years, and then deteriorates into much slower growth as purchasing power and
competitiveness are eroded," she said.

She said the Japanese disaster has no significant impact on GDP growth
because it was mainly driven by domestic demand.