Monday, March 31, 2008

Malaysia says confident of six percent growth

Malaysia says confident of six percent growth
Malaysia on Monday said it was confident economic growth for 2008 will hit six percent despite troubles in key trading partner the United States.
Deputy Prime Minister Najib Razak said domestic demand, public spending and the services and mining sectors, including the booming petroleum industry, would fuel growth.
"Gross domestic product is on the uptrend. And we strongly feel that the 2008 economic growth forecast of six percent is within our reach," he said.
Najib said that while the central bank had predicted the slower growth forecast in 2008, down from 6.3 percent in 2007 due to a US-led global slowdown, "there is enough capacity ... to grow more than that."
Last week, the central bank said Malaysia's growth is expected to slow to 5.0-6.0 percent in 2008, down from 6.3 percent last year.
Bank Negara said that rising prices of fuel, commodities and food will see headline inflation for the year rise to 2.5-3 percent from 2.0 percent in 2007.
"In 2008, the external environment is expected to deteriorate with the continued unfolding of the financial crisis that has erupted in the United States," central bank governor Zeti Akhtar Aziz said.
But mining is tipped to expand by 6.0 percent in 2008, ending two consecutive years of contraction and rebounding to 3.2 percent last year, on increased output of crude oil and natural gas, which are currently priced high.
Meanwhile Najib said Malaysia will ensure there was sufficient stockpile of rice, a staple food diet in the country, and vowed not to raise prices amid a spike in rice prices on the world market.
"At the moment there are no plans to increase the price of rice but we have to look in terms of supply to make sure there is enough stockpile of rice in the country," he said.
Spot prices of rice have recently hit more than 700 dollars a tonne, more than three times the price of just five years ago due to various factors including higher fuel and fertilizer cost.
Najib said Malaysia would source rice from neighbouring Southeast Asian countries and would in the long term increase domestic production.
"We will have to source around the region. We know the market is tighter now so we will have to step up our efforts to increase the supply of rice as part of our stockpile," he said.
Malaysia imports its rice from Thailand, Vietnam and Cambodia. But Vietnam, the world's second largest rice exporter, last week said it will cut rice exports this year in an effort to secure domestic supplies.
Source: AFP via MSN News -

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