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Wednesday, October 23, 2013

Mier projects Malaysia’s growth outlook at 5 to 5.5 pct for 2014

Posted on October 23, 2013, Wednesday

KUALA LUMPUR: The Malaysian Institute of Economic Research (MIER) has projected Malaysia’s growth outlook for 2014 to be between five to 5.5 per cent.

This is on account of the expected fiscal strategies and measures to rein in the budget deficit, generally tight financial conditions and enhanced downside risks.

Its executive director Dr Zakariah Abdul Rashid said the fiscal policy manoeuvring requires strong “political will” to deal with not only the deficit but also other tough politico-economic issues.

“These include issues such as income inequality and growing disparities across state and race in Malaysia,” he told a media briefing on the Malaysian Economic Outlook yesterday.

Zakariah was responding to a question on whether the government would face the risk of a twin deficit if it did not undertake structural reforms.

“The possibility is there. But this does not mean there have been no structural reforms at all. We are doing it, but the speed is still not enough,” he said, adding, much more initiatives were needed.

He said the public sector account has been in deficit for a long time and requires some bold measures to overcome this.

“There are political implications to doing this. That is why undertaking the bold measures need ‘political will’ as well. There should be no more delays in structural adjustments and reform plans.

“Policies that have been spelt out, structural reform initiatives and programmes need to be implemented, and not left on the shelf or on hold,” he added.

On the prolonged issue of implementation of the goods and services tax (GST), Zakariah said if the government can move away from the uncertainty, then businesses can undertake their business properly.

“The issue is when the GST will be implemented and the rate,” he added.

He said business people did not care much about whether the GST is implemented or otherwise.

“They understand that it has to be done. They also understand that it is not a short term necessity, but a long term goal of the economy and their businesses as well,” he added. — Bernama

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