PUTRAJAYA, July 6 — Datuk Seri Najib Razak braced Malaysians today for the possibility that the economy could slow down in the second half of the year, in a development which would put his government’s economic growth targets at risk.
The prime minister said the (possible) slowdown was due to external factors.
“Therefore it is important for us to have a robust domestic demand to spur and balance the economy,” he told a Budget 2011 consultation at the Finance Ministry today.
Malaysia’s economy grew by an impressive 10.1 per cent in the first quarter of this year, marking two straight quarters of growth and three straight quarters of serious contraction last year.
The Najib government has been trying to introduce economic reforms and spending cuts but has been faced with stiff public opposition.
Najib has also been trying to lift Malaysia’s profile as a destination for foreign investment to help the country achieve an average GDP growth of at least 6 per cent per annum over the next five years.
Malaysia’s FDI rates have fallen faster than other regional players like Singapore and China, and at the same time capital outflows have dampened private domestic investments. Net portfolio and direct investment outflows had reached US$61 billion (RM197 billion) in 2008 and 2009 according to official data.
The government will allocate between RM90 billion and RM91 billion for expenditure in the first two years of the 10th Malaysia Plan (10MP) Najib’s government has set among the key challenges of the 10MP the stimulation of the private sector investments to grow at 12.8 per cent annually or RM115 billion.
It was reported that the country may not be able to achieve the six per cent gross domestic product (GDP) growth target if the 12.8 per cent growth is not achieved within five years.
Najib said today that while the global economic environment had improved, there are downside risks to the recovery, including the sovereign debt crisis in Europe and the slow recovery in the United States.
He said that despite the uncertainty in the external sector, the Malaysian economy remains resilient.
To sustain the growth momentum, he said the government will ensure the implementation and close monitoring of all measures outlined in the 10th Malaysia Plan.
He added the private sector will also be the main driver to achieving Malaysia’s targeted growth, while the government plays a facilitative role.
“We should work together as a team, in the spirit of 1 Malaysia, to boost the nation’s economy,” he said.
The prime minister said the (possible) slowdown was due to external factors.
“Therefore it is important for us to have a robust domestic demand to spur and balance the economy,” he told a Budget 2011 consultation at the Finance Ministry today.
Malaysia’s economy grew by an impressive 10.1 per cent in the first quarter of this year, marking two straight quarters of growth and three straight quarters of serious contraction last year.
The Najib government has been trying to introduce economic reforms and spending cuts but has been faced with stiff public opposition.
Najib has also been trying to lift Malaysia’s profile as a destination for foreign investment to help the country achieve an average GDP growth of at least 6 per cent per annum over the next five years.
Malaysia’s FDI rates have fallen faster than other regional players like Singapore and China, and at the same time capital outflows have dampened private domestic investments. Net portfolio and direct investment outflows had reached US$61 billion (RM197 billion) in 2008 and 2009 according to official data.
The government will allocate between RM90 billion and RM91 billion for expenditure in the first two years of the 10th Malaysia Plan (10MP) Najib’s government has set among the key challenges of the 10MP the stimulation of the private sector investments to grow at 12.8 per cent annually or RM115 billion.
It was reported that the country may not be able to achieve the six per cent gross domestic product (GDP) growth target if the 12.8 per cent growth is not achieved within five years.
Najib said today that while the global economic environment had improved, there are downside risks to the recovery, including the sovereign debt crisis in Europe and the slow recovery in the United States.
He said that despite the uncertainty in the external sector, the Malaysian economy remains resilient.
To sustain the growth momentum, he said the government will ensure the implementation and close monitoring of all measures outlined in the 10th Malaysia Plan.
He added the private sector will also be the main driver to achieving Malaysia’s targeted growth, while the government plays a facilitative role.
“We should work together as a team, in the spirit of 1 Malaysia, to boost the nation’s economy,” he said.
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