Malaysia's central bank has reiterated its 6% economic growth forecast for 2007, saying domestic demand is sufficient to sustain expansion even as exports declined.
Bank Negara won't change its currency management policy because it expects foreign investment to support the ringgit, Governor Tan Sri Dr Zeti Akhtar Aziz said.
She was speaking to reporters after briefing Prime Minister Datuk Seri Abdullah Ahmad, who is also the Finance Minister, on the latest developments in the country’s economy and financial sector yesterday.
“Domestic demand is still very strong,” Zeti said.
“We have consumption demand and investment demand being strong, and the implementation of many of the government projects has reinforced domestic demand,” she said.
The pay increase for civil servants, high commodity prices and a stable job market was lifting consumption, while the mining, services and construction industries were doing well, she said.
Malaysia's economy won't be hurt by US losses tied to subprime mortgages, Zeti said.
“Right now, it is confined to the financial markets,” she said. “We do not see at this stage that it's having an impact on the economies. Furthermore, we are seeing other parts of the world, like Europe, Japan and other parts of Asia, still continuing to do very well. So, all these mitigate the impact of a possible slower growth in the US on our economy,” she said.
Thestar.com, August 10, 2007