KUALA LUMPUR, Jan 27:
Penang Institute chief executive officer and economics head Dr Lim Kim Hwa said 2015 would be a challenging year for Malaysia, especially for exporters trading in the US dollar.
He anticipates the currency and oil price “war” to continue to weigh on Malaysia’s economic performance and these factors could extend beyond 2016.
Lim spoke at the 17th Malaysia Strategic Outlook Conference 2015 here today, organised by the Asian Strategy and Leadership Institute.
Affin Hwang Investment Bank Bhd retail research head Datuk Dr Mohd Nazri Khan Adam said the economic growth of Malaysia would be much more optimistic in the second half of the year in anticipation of stable commodity prices.
He expects Malaysia to record a 5.1% growth this year, mostly influenced by external factors, rather than domestic.
Mohd Nazri noted that the major concern at the moment is the performance of ringgit, which needs to hover at a comfortable level of around RM3.20 and RM3.30 against the greenback.
IQI Group Holdings chief economist and investment strategist Shan Saeedan said Malaysians should not overreact to the current global economic situation such as falling oil prices, the European financial crisis and depreciating emerging currencies.
Stating such an attitude will have a negative impact on the local market, he said: “Overreaction will hurt the confidence level of investors, not only among locals, but foreigners as well.”
Expressing his confidence over Malaysia’s economic growth, Shan said people should view the country on its long-term prospects and not easily panic due to any short-term impact.
“People need to look at the issues from a strategic point of view and not as a tactical move or short term consideration. This is a mistake people always make, not only in Malaysia, but globally.”
Shan, one of the speakers in the first session on Economic Trends and Issues, said gaining investor confidence is crucial, as it is the main driver to determine a nation’s economic performance.
He projected the Malaysian economy would expand between 5-5.5% this year amid the uncertainty of oil prices and the ringgit’s movement throughout the year.
“The government is committed to what it is doing and as a foreigner, I am pretty bullish about prospects.
“Yes, there will be hiccups and structural issues along the way. I will never contend that things will be rosy, but the government is trying to tackle issues in a very professional manner.”
Source: http://www.therakyatpost.com/business/2015/01/27/oil-drag-malaysia-may-go-beyond-2016/