KUALA LUMPUR: The Malaysian Institute of Economic Research (MIER) is maintaining its projection of a moderate 5.2% growth on the country's gross domestic product (GDP) from last year's 7.2%, and expects the growth to improve to 5.5% next year.
MIER executive director Dr Zakariah Abdul Rashid said this year's GDP would be weighed down by structural impediments in net exports despite strong domestic demand due to supportive government policy measures.
"Underperformance in net exports will drag down economic growth in 2011," he said at the institute's economic briefing here today.
He said the growth rate would start to gain momentum in the second half of this year and onwards, bolstered by the implementation of the Economic Transformation Programme projects, pushing the GDP growth further to 5.5% in 2012.
For domestic consumption, he said, the Consumer Price Index (CPI), an indicator of price variation on domestic products and services, was forecast at 3.2% this year after hitting 2.9% in February due to the increase of global oil and food prices.
With GDP growth within its potential level of 5.0-6.0%, coupled with manageable CPI of 3.2%, Bank Negara Malaysia was expected to lift the Overnight Policy Rate (OPR) by 50 basis point to 3.25% from 2.75% currently to curb inflation, he said.
He added that as the economy gathered momentum in 2012, CPI was predicted to edge higher to 3.3%, prompting a further hike in OPR by 25 basis point to 3.5%. ' Bernama
MIER executive director Dr Zakariah Abdul Rashid said this year's GDP would be weighed down by structural impediments in net exports despite strong domestic demand due to supportive government policy measures.
"Underperformance in net exports will drag down economic growth in 2011," he said at the institute's economic briefing here today.
He said the growth rate would start to gain momentum in the second half of this year and onwards, bolstered by the implementation of the Economic Transformation Programme projects, pushing the GDP growth further to 5.5% in 2012.
For domestic consumption, he said, the Consumer Price Index (CPI), an indicator of price variation on domestic products and services, was forecast at 3.2% this year after hitting 2.9% in February due to the increase of global oil and food prices.
With GDP growth within its potential level of 5.0-6.0%, coupled with manageable CPI of 3.2%, Bank Negara Malaysia was expected to lift the Overnight Policy Rate (OPR) by 50 basis point to 3.25% from 2.75% currently to curb inflation, he said.
He added that as the economy gathered momentum in 2012, CPI was predicted to edge higher to 3.3%, prompting a further hike in OPR by 25 basis point to 3.5%. ' Bernama
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