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Domestic demand to drive Malaysia GDP growth [23-11-2011]  
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Malaysia's growth next year will be largely driven by the domestic sector, says Malaysian Institute of Economic Research (Mier).

Executive director Dr Zakariah Abdul Rashid said domestic demand may remain strong due to supportive government policies such as the Tenth Malaysia Plan, Economic Transformation Programme (ETP) and the 2012 Budget.

Private consumption will remain healthy while private investment will be boosted by the implementation of projects under the ETP.

Mega infrastructure projects, such as My Rapid Transit and the River of Life, are going to generate significant multiplier effects in the economy.

Capacity expansion by government-linked companies will spur public investment.

"The outlook for the Malaysian economy is going to be challenging, with the ongoing global economic slowdown in view of the debt crisis in Europe and the weakening of the US economy," he said, at the National Economic Outlook 2012-2013.

Mier expects the economy to grow by 4.6 per cent in 2011 and 4.2 per cent in 2012.

It also expects inflation to trend lower to 2.7 per cent next year.

He said the fear now is that the loss of growth momentum in Malaysia will continue and become serious enough to sidetrack the country from its long-term development goals.

International Monetary Fund resident representative in Singapore Ravi Balakrishnan described the global eco-nomy at a dangerous stage although Asia has shown a healthy growth rate with domestic demand holding up.

IMF has projected Malaysia's economy to grow by 5.2 per cent this year and 5.1 per cent in 2012.

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