DOMESTIC CONSUMPTION VITAL TO POWERING NATION'S ECONOMY

PUTRAJAYA, Oct 6 (Bernama) -- Malaysia expects its domestic retail market to
further power the nation's economy in the second half-of-the year, Minister
in the Prime Minister's Department Nor Mohamed Yakcop said here Tuesday.

Domestic consumption is an important factor that will contribute to a
significantly better performance in the country's economy for the second part of
the year.

Economic performance in the second half of the year will be better than the
first half of the year, he told reporters after attending a Eid Alfitr
celebration organised by the Statistics Department here, Tuesday.

The minister said this to reporters when asked of his expectation on the
country's economy in the third and fourth quarters of the year.

Malaysia posted a gross domestic product (GDP) of -6.2 percent in the first
quarter this year while a -1 percent and one percent has been projected for 2009
overall.

Asked on how well the economy will perform, Nor Mohamed said the
Statistics Department was in the midst of preparing its projections and they
would be ready by November.

Nor Mohamed said Malaysia also needed to reduce dependency on exports and
instead increase its dependence on domestic consumption.

This is expected to be the country's economic policy in the coming years as
the move is expected to safeguard the nation from the impact of another global
economic crisis.

Too much dependence on exports will affect the country when there is an
economic depression, as it would prevent the buyers from buying the products, he
said.

Nor Mohamed also said that while some western companies were expected to
face another crisis, Malaysia will be spared this as countries in the region are
experiencing the highest rate of growth presently.

"China's growth will exceed nine per cent, India will see 6-7 per cent, and
Indonesia's growth will be also impressive."

Asked if economic growth could be sustained with economic stimulus packages,
he said it would depend on the global economic trend.

He said there were two views in the United States.

One was the American conservative economist's view who feels that the
stimulus packages must be stopped and the unemployment level carried on at 9.8
percent, because putting too much stimulus packages will cause inflation.

"But that is a minority view, another view and very strong view is that
fiscal stimulus in the American ecconomy must be continued otherwise the
American economy will be doomed if it draws too fast.

"My own view...the Americans, the leading countries should not withdraw
these stimulus packages too fast or too soon," Nor Mohamed said.
-- BERNAMA