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M’sia’s infrastructure investment expected to grow

August 16, 2012

KUALA LUMPUR: Malaysia’s investment in real assets and infrastructure is expected to grow by 6.8%, amid low real interest rates in financial markets, according to a new Institute of Chartered Accountants in England and Wales (ICAEW) report.

The ICAEW report, Economic Insight, South East Asia, is produced by Cebr (The Centre for Economics and Business Research), ICAEW’s partner and forecaster.

The report said despite its dependence on export, Malaysia’s relatively buoyant domestic demand  remains an important contributor to the country’s economic growth.

However, international headwinds could lower growth in the second half of the year, resulting in an annual average of about 3.8%.

Upcoming elections may impact on economic growth but expectations are for growth of 3.5% in 2013.

A recovery of its trading partners should see Malaysia’s gross domestic product (GDP) rise by 4.0% in 2014.

“With the availability of cheap money for Asean governments, we expect that public investment in needed infrastructure will increase this year,” said Charles Davis, the ICAEW economic adviser and Cebr’s head of macroeconomics, in a statement today.

Cheap money will allow countries in Asean to fund investments in public infrastructure, from transport links to education systems, while low returns in the financial markets are likely to prompt companies to invest in machinery, technology and skills instead.

The report provides its more than 138,000 members with a current snapshot of the region’s economic performance.

It undertakes a quarterly review of Southeast Asian economies, with the focus on the six largest countries, namely Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam.



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