Friday, April 9, 2010

HSBC S'pore predicts M'sia's economy to expand 7.3%

Driven by strong rebound in exports and soaring commodity prices, Malaysia's economy is expected to expand by 7.3% this year, higher than Bank Negara's latest forecast of between 4.5-5.5%.

HSBC Singapore's senior Asian economist Robert Prior-Wandesforde said there were signs of V-shape vigorous recovery in the Asian trade cycle, resulting in a strong rebound in export figures.

"Malaysia is a trade dependent economy and will be one of the key beneficiaries of that recovery (export)," he told reporters on the sidelines of "Activate Asia: India in Focus".

The revised gross domestic product (GDP) figure was revised upwards from the previous 6.8% forecast last year by HSBC.

Prior-Wandesforde said, "Consumer confidence comprises 8% of private consumption growth in Malaysia. So, I think we are going to see a very broad based recovery in 2010, I would describe as a "sweet spot" for the Asian economic cycle and Malaysian economic cycle."

"What I want to stress here is that Malaysia and Asia as a whole have a momentum of their own. They reached a certain self-sustaining growth phase depending on their policies. What's important is to raise Malaysia's ability to grow on a long-term perspective.

"Ultimately, Malaysia is probably going to grow at 4.5-5.5% on a sustainable basis. It has the potential to improve and some of the reforms the government is talking about, if delivered, will certainly improve growth trend and sustainable growth rate," he said.

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