Nov. 12 (Bloomberg) — Malaysia’s gross domestic product growth this year will be closer to 5 percent than 6 percent amid a “less than benign” global economy, Prime Minister Najib Razak said.
The Southeast Asian nation’s economic expansion is expected to pick up in the third and fourth quarters after growing 4.6 percent in the first half, Najib told reporters today in Honolulu where he is attending the Asia-Pacific Economic Cooperation forum.
Malaysia’s central bank left interest rates unchanged this month, joining nations from South Korea to China in keeping borrowing costs steady to sustain spending at home, as the turmoil over sovereign debt in Europe threatens to further weaken the global recovery. Najib announced a budget last month that gives cash to low-income families and raises civil servants’ pay, a sign he may be preparing to call elections before they’re required by early 2013.
Malaysia is less dependent on Europe for exports and a contraction in the region will have a “less serious” impact on the country, Najib said.
“But if what happens in Europe leads to a very serious contagion effect, eventually it will snowball into a global recession and no nation will be spared,” Najib said. “It’s important for European countries to be decisive. There must be strong political will in Europe to sort themselves out.”
Najib said countries involved in the U.S.-led Trans-Pacific Partnership trade talks are setting July as a deadline for reaching an agreement.
“It is a very ambitious deadline because of the enormous amount of work that needs to be done,” he said. “There is a need to be flexible in our approach and to be realistic in terms of what can be achieved and accepted.”
Source : Bloomberg