Asia Times: Mahathir sticks to 1% growth forecast



	September 24, 1999	atimes.com

Southeast Asia

Mahathir sticks to 1% growth forecast

KUALA LUMPUR - Malaysia's Prime Minister Mahathir Mohamad says the government's forecast of gross domestic product growth of one percent this year will be maintained.

Speaking at the installation of Malaysia's 11th King, Sultan Salahuddin Abdul Aziz Shah Alhaj Almarhum Sultan Hishamuddin Alam Shah Alhaj, he said that while there were forecasts by various quarters that the economy would achieve a growth in excess of three percent this year, the government's forecast continues to be conservative.

An International Monetary Fund report said meanwhile that Malaysia could expect economic growth of 2.4 percent this year and 6.5 percent next year, aided by fiscal and monetary stimulus. In its World Economic Outlook, a twice-yearly review of its member states' economies which was released in Washington on Wednesday, the IMF noted that the country's imposition of currency controls and a pegged exchange rate had contributed to good results, but warned that both policies needed to be reviewed ''as the recovery progresses''.

The IMF earlier this month admitted that Malaysia's capital controls had brought good results, acknowledging that such ''non-standard'' methods could, after all, be justified in countries facing mounting investor pressure.

Mahathir said selective capital controls introduced in September last year had been successful in curbing currency speculators from continuing to depress the value of the ringgit and destroy the country's economy. ''Other measures such as reducing interest rates and raising liquidity in the banking system have stimulated the country's economic growth. The economy now continues to post a strong recovery while investor confidence, including that of foreign investors, continues to rise,'' Mahathir said.

(Asia Pulse/Bernama)

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©1999 Asia Times Online Co., Ltd.