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Malaysian Economy Expected To Remain In Bright Spot For Rest Of Year, 2012 [ 03-10-2011 ]

KUALA LUMPUR, Sept 26 (Bernama) -- The Malaysian economy is expected to remain in a bright spot for the rest of this year and 2012 due to its strong fundamentals.

In a special report Monday, Public Bank said the economy continued to sustain its strong fundamentals amid continued support from the government's accommodative fiscal and monetary policies.

It said the country continued to sustain a high savings ratio at over 34 per cent of gross national income.

"This is a virtue to support both domestic investment and consumption, offsetting the slowdown in external demand," it said.

The bank said in the second quarter of this year, the monetary conditions also continued to remain stable and supportive of growth.

Public Bank said the strong banking system and efficient capital markets were key factors for the strong Malaysian economy.

"Unlike its counterparts in the US and the euro area, the Malaysian banking sector has strong capitalisation, profitability and asset quality," it said.

It said the recent liberalisation of the banking sector to new foreign banks would increase the contribution of the banking sector to the growth process.

"With the successful completion of the Financial Sector Masterplan in 2010, Bank Negara Malaysia will issuing a new Financial Sector Blueprint to further deepen the development of the banking sector in Malaysia," it said.

Meanwhile, it said, inflation was expected to remain contained at 3.2 per cent in 2011, and for 2012 it would hover around 2.5 per cent to 3.0 per cent, as global food and fuel prices levelled off in recent months.

"The government is likely to take a gradual approach to further rationalise its price controls and subsidies to prevent a spike up in inflation," it said.

-- BERNAMA

 

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