Three Main Reasons For Malaysia's Economic Resilience
KOTA KINABALU, July 17 (Bernama) -- Advisor to the National EconomicAction Council, Datuk Mustapa Mohamed today outlined three main reasonswhy Malaysia has been able to withstand the onslaught of the ongoingeconomic downtrend in the US.
One of the reasons, he said, was the strength of the country'smanufacturing sector. The sector's growth has remained very steady due tothe government's initiatives in diversifying the bases of themanufacturing sector, he said.
Mustapa said that although there had been reports of retrenchments inseveral manufacturing companies, there were also reports of companiesstill needing more employees.
"Looks like the effects of the downtrend have been both positive andnegative. This is due to the government's intelligent moves to diversifythe the manufacturing sector's bases and this is one economiccharacteristic that has enabled us to withstand (the effects)," he said ina speech during his meeting with potential Bumiputera entrepreneurs hereTuesday.
Apart from that, the agriculture sector, particularly the palm oil sector,has also greatly contributed to the country's stable economic growth, hesaid.
This was brought on by the slight increase in the commodity's pricefollowing a good demand for it in the country, he said.
Mustapa said that at least one million people from the Malaysianpopulation of 22 million depended on palm oil products.
"This is a very good demand rate that can continue to maintain the marketprice of palm oil," he said.
He said that the current stable price of petroleum also gave a positiveeffect to the country's earnings rate.
"For an example, last year alone Petronas enjoyed a profit of around RM30billion due to the high petrol price.
"If the price of petrol is high, the government's revenue also goes upmore or less through the various tax payments involved," he said.
Mustapa said that although the country's economic growth for this year hadbeen forecast to go down to five percent compared with a growth of 8.5percent last year, it was expected to go up again next year.
He said the government would be taking various measures includingstrengthening the primary sectors to face the effects of the downturn inthe US economy.-- BERNAMA