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ECM Libra maintains growth forecast of 4.1-4.3 pct for Malaysia in 2009
BERNAMA, KUALA LUMPUR

ECM Libra Investment Bank is maintaining its forecast of a 4.1 percent to 4.3 percent growth for Malaysia next year although the government has revised its projection downward.

The government’s revision of the gross domestic product (GDP) forecast for 2009 to 3.5 percent from the earlier 5.4 percent, was conservative, ECM Libra economist Dr Lai Mun Chow told Bernama.

He said ECM Libra’s forecast was based on expectations that the inflation rate would cool in the months ahead, with mild recession in the US and no hard landings in China’s economy.

On the RM7 billion stimulus package, Dr Lai said it was thoughtful and timely to moderate any potential economic slowdown globally.

He said amid the signs of a slowdown in the US which would worsen the outlook for Asian exports, Malaysia needed to focus on the services sector to offset it and generate more income.

On the option for workers to reduce their contribution to the Employees Provident Fund (EPF) for two years, Dr Lai said it would boost consumer spending in the retail sector, which contributes 12 percent of the GDP.

He said the RM200 million micro credit facilities to help entrepreneurs operating small businesses was also timely as SMEs needed more capital during this tough period.

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