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Malaysia To Continue Registering Growth, Says Nor Mohamed

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Points of Essence:

  • While current financial turmoil may have overwhelmed the world’s biggest economies, it was a rare chance for Malaysia to showcase its established Islamic financial sector  to  the US and Europe bound runaway investors.

By: Ramjit

DUBAI, Oct 9 (Bernama) — Malaysia will continue to register positive growth for this year and 2009 and is not heading for a recession, says Second Finance Minister Nor Mohamed Yakcop.

However, he said while the government was confident of achieving a growth of 5.7 percent this year, the 5.4 percent target for next year will have be recalculated because of the global financial turmoil.

“We believe we can weather this crisis although we cannot be unduly complacent and have to be ever vigilant in the context of the daily changing turmoil,” he told Malaysian reporters yesterday evening during a cocktail reception in conjunction with the ongoing Cityscape Dubai event here.

He attended the Asean Finance Ministers Meeting held here.

Nor Mohamed said countries all over the world were going to be affected by the global financial turmoil in some way, depending on the length and extent of the recession in the United States and Europe.

According to him, inflation is no longer a major concern for Malaysia.

He said while inflation was a major concern a few months ago, it was no longer so now following the significant drop in the prices of commodities.

Nor Mohamed also stressed that Malaysia did not experience a banking crisis, being in a different environment from the US and Europe because the country’s banking system remained strong with low non-performing loans and high risk weighted capital ratio.

The Malaysian economy, he said, was also now well diversified with exports contributing less than 20 percent of the growth while domestic consumption and investment have become a major engine of growth.

Nor Mohamed said Malaysian exports were now heading for more diversified markets, with more goods going into China and India.

Exports to China have increased to nine percent of the total exports compared to just two percent a few years ago, he said.

He was confident that both China and India will register high growth and continue to import from Malaysia.

Nor Mohamed said what Malaysia needed now was to maintain the confidence level and make sure that the social safety net was taking care of those who may be vulnerable.

He said the current financial crisis also provided opportunities for Malaysia, particularly in Islamic banking.

“At times like this, when funds from the Middle East are losing money in the US and Europe, they will be encouraged to come to Malaysia which is one of the strongest Islamic banking centres in the world,” Nor Mohamed said.

He said in addition to portfolio investment, Middle East investors could also invest in development projects being undertaken in Malaysia instead of buying iconic assets in the US and Europe which have already lost much in terms of value.

Source: BERNAMA

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Written by Suapi Shaffaii

October 9, 2008 at 8:42 pm

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