Malaysia Headed In the Right Economic Direction, Says Economist

By Christine Lim KUALA LUMPUR, Dec 6 (Bernama) -– Malaysia is moving in the right path in terms of transforming its economy to a high-income status through the Economic Transformation Programme, even though this achievement may involve a long term process, said a prominent European economist, Douglas McWilliams. McWilliams who is chief executive of The Centre for Economics and Business Research (Cebr) based in London said Malaysian economy has evolved from being reliant solely on export to a more diversified base with the services sector emerging to be an important economic driver. "While economic growth will be impacted by the dismal outlook in the global economy on the backdrop of the escalating Europe sovereign debt crisis, Malaysian economic growth will be right on track with the pick up in global economy in 2013," he said during an interview with Bernama TV on Monday. He also projected a five per cent growth for Malaysian economy this year and a decline to between 4.2 per cent and 4.3 per cent growth next year in line with global economic weaknesses. He said Malaysia had a lot of scope in terms of fiscal expansion by the government as its debts were not huge compared with the sovereign debts in Europe. "The key is to ensure that domestic consumption is able to fill the hole for the slowdown in export growth," McWilliams informed. McWilliams also expects Bank Negara (central bank) to continue to monitor the economic situation closely to see if there is a need for a cut in interest rates. He said the European leaders were also working on a concrete solution to the European debt crisis. McWilliams said domestic consumption will play a pivotal role in the Asean economy with action by governments to increase domestic consumption. He said Asean currencies were also rising in value compared with other currencies, while western currencies were getting weaker. He said the Western economy was also bracing for structural adjustments with higher wages and longer holidays compared to Malaysia and the rest of Asean countries. --BERNAMA