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AFP M'sia shows little fear over high oil prices
By Kapal Berita

25/9/2000 10:26 am Mon



  1. FDI menurun dari 6.3 billion ke 1.8 billion berbanding tahun lepas.
  2. Perbelanjaan persendirian (yg menyumbang 45% dari GDP) turun dari 14.4% (Suku Pertama) ke 13.9%.

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 country.

"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 economic crisis.

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 foreign investment.

Ramon Navaratnam, a former treasury deputy chief, cautioned against euphoria over the recovery.

"The economy is showing signs of gradual weakening," he warned.

Navaratnam said private consumption and private investment had not returned to pre-crisis levels.

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 percent.

"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 Malaysian economy.

"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 growth.

"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 last year.

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 foreign investments.

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.