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AFP M'sia shows little fear over high oil prices
By Kapal Berita
25/9/2000 10:26 am Mon
Jangan lupa perhatikan ke mana Rafeedah Aziz berjalan sejak
kebelakangan ini..... Korea, USA dll. Apa kena? Sudah tentu ada
sesuatu yang tak kena. Orang bodoh sahaja yang terkena. Kesihan dek
Umno dan suku sakatnya yang tertipu oleh ucapan berangka-angka....
mereka lupa menterinya dah gundah gelana kerana jerat asyik
tak mengena.... maka menangis dan mengemislah ia sambil mengesat air
mata. Pura-pura lagi ke?
Malaysia shows little fear over high oil prices
KUALA LUMPUR, Sept 24 (AFP) - While soaring oil prices are not causing much
concern among Malaysian policymakers, analysts have urged the government to plug
emerging economic weaknesses to sustain long term growth.
Daim Zainuddin, finance minister said Sunday, oil prices should fall next year after the
northern hemisphere's winter season and remained upbeat about economic growth.
"We should be alright," he said, when asked about the economic outlook for the next six
months but urged consumers to "spend wisely."
Daim also said the high oil prices were a bonanza for Malaysia as it is an oil exporting
"It's a boon but we also import. Ours is premium oil and we import heavy crude. So, it
cuts both ways," he said.
With oil prices near 10 year highs, analysts said the United States -- Asia's key trade
partner -- might see slower economic growth.
Pundits said Malaysia's recovery had been largely cyclical, due to strong overseas
demand for its electronics products and with its economy insulated by the September
1998 selected exchange controls.
Data shows that Malaysia has recovered impressively from the July 1997 Asian
Gross domestic product slumped by 7.5 percent in 1998 but rebounded to grow 5.8
percent in 1999.
The economy registered year-on-year economic growth of 11.9 percent in the first
quarter and 8.8 percent in the second quarter.
The central bank said global demand was expected to remain strong and domestic
demand would grow with official projections for full year economic growth at 5.8
percent for 2000.
But economists said the recovery should not be taken for granted since the economy
was now showing signs of weakening such as the dip in consumer demand and falling
Ramon Navaratnam, a former treasury deputy chief, cautioned against euphoria over the
"The economy is showing signs of gradual weakening," he warned.
Navaratnam said private consumption and private investment had not returned to
Private consumption, which constitutes 45 percent of gross domestic product, had in
fact slowed down to 13.9 percent compared to 14.4 percent in the first quarter, he said.
"Consumers are wary about spending on dining out and are putting off buying expensive
consumer items," he told AFP.
Navaratnam, now an adviser to construction giant Sungei Way Group, attributed the
cautious attitude of consumers to fears of another economic slowdown.
On inflation, he said, consumers doubted that it could be reigned in to under three
"Prices of goods and services are rising steadily every month causing pain to
consumers," he said.
Navaratnam said the October budget should aim to sustain and not accelerate growth,
adding that a growth rate of six to seven percent would be appropriate.
"If we push for faster growth, it could strain the financial institutions and the economy
system as a whole," he said.
But Daim brushed aside inflationary fears due to the rapid economic recovery of the
"No fear of inflation (due to rapid growth).
"We have controlled all these things in the last 20 years, except in 1997 and 1998. We
have no problem. Most important thing, have faith in the government," he said.
The government hopes to keep inflation below three percent for the whole year. Inflation
in July remained tame at 1.4 percent.
Daim also said new data showed there was a reverse in the decline in foreign
investments. He declined to elaborate.
An analyst with a Singapore-based research house told AFP Malaysia needs to attract
foreign direct investments to sustain technological advancement needed for long term
"The main concern now is the inflow of foreign investments is insufficient to ensure
long term growth," he said, on condition of anonymity.
Foreign direct investments have declined to 1.8 billion ringgit (474 million dollars) for
the first five months of this year compared to 6.3 billion ringgit during the same period
He said the capital curbs, political uncertainty and the sacking and subsequent jailing of
former deputy premier Anwar Ibrahim were among factors responsible for the decline in
Officials had said Malaysia would maintain the capital controls and currency peg
imposed two years ago.
The Malaysian ringgit was fixed at 3.80 to the US dollar as part of capital curbs.