Malaysian Growth to Slow Down This Year Amid U.S. Fears: Economists
January 29, 2001 - 0:0
KUALA LUMPUR Malaysia's growth will slow down this year as the U.S. economy falters and corporate restructuring stalls, according to a poll of 11 regional economists published Sunday. According to an AFP report, ten of the 11, who were questioned by the ***Edge Business**** weekly, gave forecasts for gross domestic product growth for 2001 and these varied between 4.0 and 7.0 percent. Three opted for 6.0-7.0 percent and the rest a lower figure. The official forecast for this year is 7.0 percent. The government estimate for last year is 7.5 percent but Finance Minister Daim Zainuddin has said this is likely to be exceeded. Seven of the 11 mentioned the U.S. slowdown as a potential danger for the local economy while four cited inadequate or stalled domestic corporate reform. Three mentioned the danger of a global slowdown and two cited domestic political risks. The ****Edge**** said all the economists believe the recovery from the 1998 recession is sustainable but 82 percent say it has not extended to all sectors, with construction the biggest laggard. A slower U.S. or global economy would hit demand for electrical and electronic goods which make up 61 percent of all Malaysia's exports. Almost 21 percent of all the country's exports go to the United States. Corporate restructuring was the main domestic concern. Inadequate restructuring of debt-laden companies could undermine investor confidence and hold back long-term recovery," one foreign economist was quoted as saying. Finance Ministry adviser Mustapa Mohamed urged Malaysians on Saturday not to be unduly pessimistic about overseas developments, saying the U.S. economy was not expected to go into recession. "We should not be pessimistic of external developments. We should pray for the country's continued progress and development," Bernama news agency quoted him as saying.