Malaysia to register 5-6 per cent GDP growth this year, says PM
June 05, 2008
PUTRAJAYA, June 5 (Bernama) — Malaysia is expected to register a gross domestic product (GDP) growth of between five and six percent this year compared with 6.3 percent last year, Prime Minister Abdullah Ahmad Badawi said WEdnesday.
However, following the fuel subsidy reform announced Wednesday that would see petrol price up by about 41 percent, he said the country’s inflation this year may rise to 4-5 percent from its earlier target of 2.5-3.1 percent.
“Our target for GDP is still 5-6 percent. I am being very conservative. If I am too optimistic, you will say that I am just trying to make people happy.
“It (the scheme) will also affect inflation. We see it at 4-5 percent for full year,” he said after announcing the Subsidy Restructuring Scheme here Wednesday.
Effective June 5, petrol prices will increase by 78 sen to RM2.70 per litre while diesel will rise by RM1 to RM2.58 per litre.
At the same event, Second Finance Minister, Nor Mohamed Yakcop, said the restructuring would create a more efficient economy in order for the country to be more prudent and have the necessary fund for national expenses.
“We have to do it to create a more efficient economy because we need the budget to be prudent and need to have enough funds for the various expenses of the government,” he told reporters here Wednesday.
He said the subsidy reform should also not deter foreign direct investments from flowing into the country as the restructured fuel subsidy would make Malaysia’s economy more efficient.
“We are business-friendly, we are improving our services and the time to get the licences is getting better. That is the reason why they (foreigners) should come in. Nobody should come in because we are subsidised.
“We believe in the long run this greater efficiency will put us in good stead,” he said.
Asked on the GDP forecast this year, Nor Mohamed said there were other macroeconomic figures such as high palm oil prices and good rural economy that would help sustain the country’s growth.
On inflation this year, he said it was a global issue and Malaysia was facing it too.
“We think it will go up to five percent. But we will have a better grasp on these figures come Budget 2009 on Aug 29. Then we will give a better figure on inflation and growth target,” he said. (BERNAMA)