Log in
Login
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
Settings
Settings
Dynamic quotes 

4-Traders Homepage  >  News

News

Latest NewsCompaniesMarketsEconomy & ForexCommoditiesInterest RatesHot NewsMost Read NewsRecomm.Business LeadersCalendar 

World Bank Forecasts Malaysia Economic Growth +5.1% in 2013, 2014

share with twitter share with LinkedIn share with facebook
share via e-mail
0
06/24/2013 | 03:45pm CEST
   By Abhrajit Gangopadhyay 
 

KUALA LUMPUR--The World Bank Monday forecast Malaysia's economy to grow 5.1% annually through 2014, powered by strong investments and consumption.

The expansion pace is a deceleration from last year's 5.6% following weak external conditions.

"While domestic demand will decelerate in 2013 from the buoyant levels of 2012, it will remain Malaysia's main source of growth," the World Bank said in its Malaysia Economic Monitor report.

The multilateral agency expects this year's growth to be supported by strong momentum in investments, accommodative fiscal and monetary policies and higher household income amid low unemployment level.

A pick-up in exports in 2014 will offset slowing domestic demand, which may set in with tighter fiscal and monetary policies next year, the report said.

Malaysia has often been criticized for its practice of spending billions of dollars to shield consumers from global price shocks by subsidizing fuel and food. It also offers cash handouts to low-income groups and hasn't yet introduced a consumption-based tax to broaden the tax base and raise government revenue.

While the government's steps have been growth-supportive, the central bank has kept the policy interest rate steady at 3.0% for past 12 successive monetary reviews.

Analysts have been calling for Southeast Asia's third largest economy to retool its subsidy system and introduce Goods and Services Tax among others to boost fiscal discipline and help cut its gaping budget deficit, which has refused to go since the Asian Financial Crisis battered the economy in the late 1990s.

The government spends over MYR2 billion a month on fuel subsidies alone. Many economists consider the subsidies wasteful, as beneficiaries include middle-to high-income consumers who could afford costlier cooking fuel and gasoline.

The World Bank expects the government to initiate subsidy reforms and start taking gradual steps to implement goods and services tax from the next year.

"The sustainability of Malaysia's favorable near-term outlook into 2015 and beyond hinges on the implementation of structural reforms," the World Bank said.

Apart from fuel subsidy reforms, Malaysia needs to cut its reliance on commodities revenue to become a high-income economy by 2020, it added.

"There is a modest risk that Malaysia's current account position could turn to a deficit in the event of a sharp decline in commodity prices," it said.

According to latest data, Malaysia's April trade surplus, a key component of current account surplus, was hammered to the smallest in more than 15 years as exports contracted for three consecutive months, dragged down by lower prices of palm oil and crude oil.

Write to Abhrajit Gangopadhyay at abhrajit.gangopadhyay@dowjones.com

share with twitter share with LinkedIn share with facebook
share via e-mail
0
React to this article
Latest news
Date Title
10:23p TRANSCANADA : seeks $15B for rejection of Keystone pipeline
10:23p AMERCO /NV/ : Change in Directors or Principal Officers, Other Events, Financial Statements and Exhibits (form 8-K)
10:23p ASHFORD HOSPITALITY PRIME, INC. : Regulation FD Disclosure, Financial Statements and Exhibits (form 8-K)
10:23p INDEPENDENCE REALTY TRUST, INC : Entry into a Material Definitive Agreement, Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant, Financial Statements and Exhibits (form 8-K)
10:22p ECB's Draghi expresses sadness at Brexit vote as markets plunge
10:21p RED HAT INC : Other Events (form 8-K)
10:21p IIROC Trading Resumption - NAS.H
10:21p CAVA RESOURCES INC : Cava Resources Inc. Announces Financing
10:21pDJUSDA CROP PROGRESS : Soybean Condition/Progress-Jun 27
10:20p CASEY GENERAL STORES : CASEYS GENERAL STORES INC MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Dollars and gallons in thousands, except per share amounts) (form 10-K)
Latest news
Advertisement
Hot News 
SWEETT : The K2 Principal Fund L.P. - Public Opening Position Disclosure
HEARTWARE : Medtronic to Expand Heart Failure Portfolio with Acquisition of Heartware International
MORTGAGE ADVICE BUREAU : Expects Fewer Transactions After Brexit Vote
INTERQUEST : Trading Update
INVESCO PERPETUAL ENHANCED INCOME : Dividend Declaration
Most Read News
12:01a THE BOSTON CONSULTING GROUP : Announces Move to Tishman Speyer's Pier 4 Development
04:03p Brent crude tumbles to seven-week low on dollar rally, Brexit turmoil
02:49aDJFRESENIUS SE KGAA : CEO Is Leaving His Post -- WSJ
Most recommended articles
04:20pDJUSDA CROP PROGRESS : Spring Wheat Condition/Progress-Jun 27
04:20pDJUSDA CROP PROGRESS : Corn Condition/Progress-Jun 27
04:18p FCC chair proposes retaining most media ownership rules
04:17pDJBrazil's Senate Budget Report Confirms Some Accusations Against Rousseff
04:13p SUMNER REDSTONE : Viacom lead director turned down offer for another director to meet Sumner Redstone