Malaysia on track for 5-6pc GDP growth

Publication: NST

Date of publication: Jul 24, 2013

Section heading: Business Times

Page number: 004

Byline / Author: By Francis Dass

KUALA LUMPUR: The government is optimistic that Malaysia will achieve the targeted five to six per cent gross domestic product (GDP) growth this year, buoyed by a strong domestic economy, said Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah.

He said private and public consumption, private investment and government expenditure are supportive of the country's economy.

Speaking to journalists after delivering a keynote address at the 17th Malaysian Banking Summit 2013 yesterday, Ahmad Husni is optimistic that the country will record a five per cent GDP growth for the first half of the year after registering 4.1 per cent in the first quarter.

"Normally, we start off slowly but improve in the subsequent quarters," he said.

He said inflation has not gone up much, adding that "when we talk about subsidy rationalisation, we will relate that to increasing prices and we will study that carefully".

The minister briefly touched on the goods and services tax (GST) issue, saying that the implementation ofGST will take time as the government is studying its implementation and weighing the role of subsidy rationalisation.

The government, he assured, will be careful in keeping the prices of goods within the level that will not (adversely) affect the population.

In his speech earlier, Ahmad Husni highlighted that Malaysia's economy has been expanding at an annual rate of 4.2 per cent annually since 2009 and the foreign currency reserve is at a healthy US$136.1 billion (RM431 billion).

Total approved investments in the first quarter, he said, stood at RM49.3 billion. He cited these factors for his optimism on the state of the economy.

Addressing the bankers attending the summit, themed "Future Banking: Driving Growth, Prosperity and Transformation", Ahmad Husni pointed out that the financial sector remains the "lifeblood" and growth engine of Malaysia's economic development as it employs 145,000 people and contributes 12 per cent to the nation's GDP.

"Our banking system is a catalyst for growth and development for other economic sectors by ensuring optimal allocation of capital and resources," he said.

He praised the efforts made by banks to be inclusive, with the roll-out of facilities and services like "agent banking" and mobile banking which expanded the reach of financial services to segments of population that were underserved.

On the Financial Services Act 2013, which came into force recently, he said the new rules are essential in providing Bank Negara Malaysia with adequate powers to effectively respond to new and emerging financial risks.