Posted on 09 Oct 2008
Malaysia: No recession but slower growth
THE Malaysian economy will grow more slowly than previously forecast by the government as credit markets tighten around the world, said Second Finance Minister Tan Sri Nor Mohamed Yakcop.
Guaranteeing banking deposits in Malaysia is “not relevant,” because “we don’t have a banking crisis,” Nor told reporters in Dubai yesterday after a meeting of Southeast Asia finance ministers. Growth will be at least 5 per cent in 2008 and maybe the same in 2009, he said.
Economic growth in Malaysia will ease to 5.7 per cent this year and 5.4 per cent in 2009, the weakest pace since 2005, the Ministry of Finance said in August.
CIMB Investment Bank, part of Malaysia’s second-largest financial-services provider, yesterday cut its economic growth forecast for 2009 to 3 per cent from 5 per cent. The bank cited expectations of a year-long recession in the US, Malaysia’s largest trading partner.
The Malaysian ringgit has lost about 9.4 per cent in the last six months against the US dollar.
“Malaysia will not go into recession but will probably be a little lower than the official estimate,” Nor said today. “China and India will produce positive growth and our exports to those countries will remain strong. Domestic consumption will support economic growth.”
