Zeti: M'sia on track to achieve 5-6% GDP growth

KUALA LUMPUR: Malaysia is on track to achieve gross domestic product (GDP) growth of five to six per cent this year driven by strong domestic demand and investment inflows despite the current slowdown in China, Bank Negara Malaysia (BNM) Governor Tan Sri Dr Zeti Akhtar Aziz said.

She said the central bank had already included the risk from global slowdown in the projection and the current situation in China will not affect the GDP target for the whole year.

“These (global risks) are already priced into our forecast, but, if it deteriorates further, of course it will affect us,” she told reporters after presenting the Kijang Emas Scholarship to selected excellent students here yesterday.

However, she said should the global economy slow down significantly, the effect would not be as bad as previously due to the strength of the domestic demand and strong growth in investment.

Zeti said the country’s economy was still strong as investment was still taking place and consumption was steady at six to seven per cent.

“We face a lot of challenges that are happening in the global economy, in Europe, the US, UK and Japan, which are important trading partners but it is important for us to stay focus on the economy and keep going,” she said.

Asked on the expansionary fiscal policy highlighted by contesting parties in the upcoming general election, she said fiscal sustainability was very important and it needed to be accompanied by increase in revenue.

She also said that fiscal policy needed to be targeted at those areas that have the highest impact and ensured that everyone would receive the benefit.

Meanwhile, commenting on the strengthening ringgit, she said the development of the local unit was due to the weakening of other currencies as well as good inflows of investment into the country.

“This is not unusual, we have seen it before. But what is more important is our foreign exchange market has been orderly.

“And also the financial system, the banking system in particular, bond market and capital market in general, has been able to intermediate these flows in an orderly manner,” she said.

She said the capability of the local market to absorb the volatility of the global economy was due to the liberalisation of the rules for foreign exchange transaction, which has given the flexibility for corporates to better manage their exposure.

The Kijang Emas scholarship was introduced by BNM since 2005 for top Sijil Pelajaran Malaysia’s (SPM) students as part of its efforts to contribute to nation building and nurturing high-potential talents to participate in the country’s growth and development.

To date, 42 students had received the scholarship including this year’s receiver, Muhammad Aiman Sabeh Mohd Shahib who got 9A+, Asha Nair Unnikrishnan (10A+) and Wan Hashedah Wan Haron (9A+).