ID :
210767
Mon, 10/03/2011 - 07:52
Auther :
Shortlink :
https://oananews.org//node/210767
The shortlink copeid
GDP GROWTH TO PICK UP MODESTLY TO 5.3 PCT IN SECOND HALF, SAYS HLIB
KUALA LUMPUR, Oct 3 (Bernama) -- Hong Leong Investment Bank (HLIB) is maintaining the view that gross domestic product (GDP) growth will pick up modestly to 5.3 per cent in the second half of this year.
For full year 2011, it would be an average of 4.8 per cent.
In a research note on Monday, HLIB said it does not expect domestic growth to accelerate drastically until November/December, due to the slow implementation of the Economic Transformation Programme (ETP) projects, as well as subdued mining output arising from the Petronas maintenance shutdown.
Given that risks to growth have increased while inflation appears to have peaked in June, HLIB expects Bank Negara Malaysia (Malaysia's Central Bank) to hold the Overnight Policy Rate (OPR) steady until year-end.
The recent financial turmoil driven by the US downgrade and European debt woes is also another factor prompting the central bank to stay pat, it added.
It said changing the course of interest rates in an environment of volatile and abundant capital flows, may end up amplifying the magnitude of flows and hence, affect the stability of the financial system.
HLIB also expects Bank Negara to continue its vigilance on excess liquidity to minimise the risk on the banking system while ensuring sustainable growth.
It said recent capital outflows, as evidenced by the weakening ringgit amid a foreign selldown, should have drained some liquidity from the local system.
This in turn lessens the excess liquidity situation and helps in containing inflation and an asset bubble, it added.
Given the external uncertainty, HLIB said it does not expect any drastic measures from the central bank to tighten its financial or monetary policy.
-- BERNAMA
For full year 2011, it would be an average of 4.8 per cent.
In a research note on Monday, HLIB said it does not expect domestic growth to accelerate drastically until November/December, due to the slow implementation of the Economic Transformation Programme (ETP) projects, as well as subdued mining output arising from the Petronas maintenance shutdown.
Given that risks to growth have increased while inflation appears to have peaked in June, HLIB expects Bank Negara Malaysia (Malaysia's Central Bank) to hold the Overnight Policy Rate (OPR) steady until year-end.
The recent financial turmoil driven by the US downgrade and European debt woes is also another factor prompting the central bank to stay pat, it added.
It said changing the course of interest rates in an environment of volatile and abundant capital flows, may end up amplifying the magnitude of flows and hence, affect the stability of the financial system.
HLIB also expects Bank Negara to continue its vigilance on excess liquidity to minimise the risk on the banking system while ensuring sustainable growth.
It said recent capital outflows, as evidenced by the weakening ringgit amid a foreign selldown, should have drained some liquidity from the local system.
This in turn lessens the excess liquidity situation and helps in containing inflation and an asset bubble, it added.
Given the external uncertainty, HLIB said it does not expect any drastic measures from the central bank to tighten its financial or monetary policy.
-- BERNAMA
