In­fla­tion­ary pres­sures of 3-4pc seen on higher en­ergy prices, weaker ring­git

New Straits Times - - Front Page - RUPA DAMODARAN KUALA LUMPUR ru­pa­

BANK Ne­gara Malaysia has pro­jected the econ­omy to grow by be­tween 4.3 and 4.8 per cent this year.

Gov­er­nor Datuk Muham­mad Ibrahim said the grad­ual im­prove­ments in global growth, com­mod­ity prices and do­mes­tic de­mand would lend sup­port to eco­nomic ac­tiv­i­ties.

The new growth pro­jec­tion comes within the ear­lier pro­jec­tion by the Trea­sury when the fis­cal bud­get was an­nounced in Oc­to­ber last year.

In­fla­tion­ary pres­sures will likely to rise to three to four per cent due to higher global com­mod­ity and en­ergy prices and weaker ring­git.

“They are cost-driven fac­tors. There will be months when the rate rises even above four per cent.

“But we ex­pect the rate to be lower in the sec­ond half,” he said at a me­dia brief­ing to launch the cen­tral bank’s an­nual re­port, here, yes­ter­day.

Over­all, the cur­rent ac­count is ex­pected to reg­is­ter a sur­plus of one to two per cent of gross na­tional in­come this year.

On the sup­ply side, all eco­nomic sec­tors are pro­jected to reg­is­ter pos­i­tive growth this year, with the ser­vices and man­u­fac­tur­ing sec­tors as the key con­trib­u­tors to over­all growth.

The agri­cul­ture sec­tor is also ex­pected to re­bound as yields re­cover af­ter the El Niño weather phe­nom­e­non while growth in the min­ing sec­tor is ex­pected to re­main steady, as a stronger ex­pan­sion in nat­u­ral gas out­put off­sets a mod­er­a­tion in the crude oil sub­sec­tor.

Al­liance Bank de­scribed the cen­tral bank’s pro­jec­tions as rea­son­able, given the cur­rent eco­nomic chal­lenges.

The re­search house ex­pects the econ­omy to grow by 4.4 per cent with the re­silience in pri­vate con­sump­tion amid man­age­able head­winds like soft labour mar­ket and weak con­sumer sen­ti­ments.

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