Global slowdown or no, Malaysia will grow by 5% to 6%, says Awang Adek
KUALA LUMPUR: Deputy Finance Minister Dr Awang Adek today rubbished off RHB Research Institute’s low growth forecast, insisting that Malaysia was on target to achieve 5% to 6% growth next year despite fears of a global economic slowdown.
RHB’s projection of 3% growth was “too off the mark”, he told reporters covering Parliament.
The research house, in a statement issued yesterday, said the risk of a severe global recession was high and rising because neither the US nor Europe could withstand another shock that may come from the Euro zone’s debt crisis.
But it said a recession could be averted if American and European leaders were to act fast enough to avert a contagion that could lead to a complete meltdown in confidence.
Awang Adek cited a report by the International Monetary Fund (IMF), which gave a forecast on Malaysian growth that was similar to Putrajaya’s.
He said the IMF’s projection was more credible than RHB’s because it had “more resources”.
“Even the IMF is projecting a 5% growth,” he said. “So how can RHB’s be 3%. This is too far off the mark. The IMF has more resources. How can it be wrong?”
Putrajaya’s forecast was given in the budget speech that Prime Minister Najib Tun Razak delivered in Parliament last week. Market analysts and government critics have described it as unrealistic.
They said Malaysia would feel the impact of a global economic slowdown because of its dependence on exports.
Bank of America Global Research estimated Malaysia’s gross domestic product to grow at 4.2% in 2012. Maybank Investment Bank said it expected the figure to be between 3.5% and 4%. CIMB Investment Bank’s forecast was 3.8%.
Najib’s growth projection was seen as an attempt to create a feel-good factor as national elections draw near.
He promised aid to the poor, more money for civil servants and cash handouts to various groups.
Critics say the allocations are targeted towards constituents that form Barisan Nasional’s Malay powerbase.