KUALA LUMPUR: Malaysia’s economy is projected to grow at a steady four to five per cent this year, anchored by the resilient domestic demand, says Bank Negara Malaysia.
The central bank said private investments would be supported by domestic-oriented industries and the ongoing implementation of projects under the Economic Transformation Programme (ETP).
Most sectors would continue to expand this year, it said in the 2011 Annual Report released yesterday.
Domestic-oriented industries’ performance was expected to remain firm, particularly the construction sector, projected to record stronger growth, backed by the implementation of major infrastructure projects and the Special Stimulus Package, it said.
While the mining sector’s growth was expected to recover, the agriculture sector was likely to register a moderate growth on lower growth for both palm oil and rubber following the strong performance seen last year.
On the external front, the current account surplus was projected to remain large at RM109.5 billion or 12.2 per cent of the Gross National Income (GNI), it said.
Although gross exports were expected to record a slower growth this year, the trade account surplus would remain large, it said, adding that the surplus would be primarily supported by commodities’ exports and non-E&E manufactured products.
Bank Negara also said labour market conditions were expected to soften this year pursuant to slower economic activities.
Unemployment rate was projected to increase to 3.2 per cent this year.
Job creation was projected to be concentrated in the domestic-oriented sectors, particularly in the services and construction sectors, while headline inflation is expected to moderate this year, averaging between 2.5 per cent and 3.0 per cent.
Bank Negara said the monetary policy would continue to facilitate economic growth, manage risks towards inflation and financial imbalances build-up.
Should the global economy enters a new phase of even weaker growth this year and adversely affect the Malaysian economic outlook, the Monetary Policy Committee at the central bank has the flexibility to respond to adjust the degree of monetary accommodation, it said.
With the launch of the new Malaysian currency series, Bank Negara has also engaged closely with banks, businesses and cash-handling vendors to ensure a smooth transition to the new coins and notes coming into circulation this year.
As part of efforts to enhance international cooperation, the central bank continues to be involved in technical collaborations with external agencies and central banks from other emerging economies, particularly in Islamic finance, organisational development, financial inclusion, consumer protection and financial education.
Meanwhile, Bank Negara’s financial position, as audited and certified by the Auditor-General, remained strong last year.
The bank’s total assets were RM473 billion for the financial year ended Dec 31, 2011. It declared a RM2 billion dividend to the government for last year. — Bernama