Bank Negara Malaysia Annual Report 2006

The Malaysian economy is forecast to grow at a slightly faster pace of
6% in 2007, supported by sustained global growth and resilient domestic
demand, compared with 5.9% in 2006, according to Bank Negara Malaysia.

Its governor Tan Sri Dr Zeti Akhtar Aziz said gross domestic
product (GDP) growth would be broad-based as the mining and
construction sectors, which contracted in 2006, were expected to
register positive growth.

“The services and manufacturing sectors would continue to drive
growth, xpanding at a higher rate than the overall GDP growth,”
she told a press conference in Kuala Lumpur after the release of
the 2006 annual report on March 21.

The manufacturing sector would be led by resource-based industries and
further supported by the electronics and electrical (E&E) sectors. The
services sector would benefit from the positive effects of the Visit
Malaysia Year 2007 tourist promotion campaign and new activities.

Bank Negara forecast the mining sector to grow 2.8% in 2007
(2006: -0.2%),construction 3% (2006: -0.5%). However, the
agriculture sector was expected to expand at a slower pace of 3.2% (200: 6.4%),
manufacturing 6.6% (2006:7%) and services 6.3% (2006: 6.5%).

“While the E&E sector may experience some moderation in the first
half of2007 due to the expected moderation in the US economy, the
growth would be supported by other industries,” she said.

On inflation, Zeti expected the average inflation rate to moderate to
between 2% and 2.5% for 2007 from the 3.6% last year which was affected
byhigher energy prices.

However, three key developments which might cause consumer prices to rise
would be a stronger-than-expected wage increase, disruption of food
supplies due to adverse weather conditions and rising oil prices.

On interest rates, she said the monetary policy remained accommodative at
the current levels.

She also said foreign direct investment (FDI) was expected to remain high,
largely from retained earnings by existing multinational corporations
(MNCs) operating here and new FDI flows into the manufacturing, services
and oil and gas (O&G) sectors. FDIs in 2006 totalled RM37.2 billion and was
expected to be around the same levels this year, she said.

The federal government deficit was expected to shrink to 3.4% of GDP in
2007 (2006: 3.5%) due to expected higher revenue collection. The government
would continue to rely on domestic sources to finance the fiscal deficit.

Zeti said a total of RM34 billion was repatriated in 2006 compared with
RM37 billion in 2005. She expected the figure to be around the RM34 billion
to RM37 billion in 2007.

On aggregate domestic demand, the central bank projected it to remain
resilient and grow at 7.4% in 2007. Private sector investment was forecast
to grow at 10.4% (2006: 9.7%) while private consumption was expected to
grow at a slower pace of 6.4% (2006: 7%).

Public sector expenditure was expected to increase to 7.7% (2006: 7.2%),
mainly due to higher investments at 11.4% (2006: 6.5%) while consumption
was expected to fall to 4.1% (2006: 7.9%).

On the balance of payments, the central bank said the current account
surplus was expected to remain large at 16.3% of gross national product
(GNP).

“Both gross exports and imports are expected to expand by 8.2% and 9.8%
respectively,” it said.

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Comments
2 Responses to “Bank Negara Malaysia Annual Report 2006”
  1. Thai says:

    How interesting about the Malaysian economy growing. I had no idea. Well all I can say about that right now is, good for them. I am truly happy for them, I just hope our US economy picks up soon.

    Thank you,

    Thai

  2. bona says:

    can i know about the growth rate of malaysia banking between year 2000 until this year (2009), i mean how much the Malaysia financial institutions growth on that period.
    i think this question is difficult. but if u know the answer, please reply to my e-mail..

    thanks

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