MALAYSIA’S growth is still healthy and far above the global average, says Prime Minister Datuk Seri Najib Razak.
Citing credit ratings agency, FitchRatings, which has maintained the country’s ‘A-’ rating with stable outlook, the prime minister said it is a reflection of the country’s strong economic fundamentals.
“Headline inflation has been kept low, and despite challenging global headwinds.
“But, there is still plenty to do to achieve our 2020 goals,” he said at the Khazanah 10th Year Anniversary Dinner, here, yesterday.
Programmes at the dinner were delayed to view the “live” telecast of the match between Malaysian shuttler Lee Chong Wei and arch-rival Lin Dan of China, in the men’s singles semi-final competition from Rio de Janeiro.
Fitch yesterday said Malaysia’s real gross domestic product (GDP) growth had remained stronger than the median of 'A' rated peers.
“Malaysia’s economy continues to slow and Fitch forecasts real GDP growth of four per cent in 2016, down from five per cent last year. However, on average real GDP growth still remains stronger than the ‘A’ median,” it said in a statement.
“Fitch forecasts government debt to decline to less than 54 per cent of GDP at end-2016 from 54.5 per cent at end-2015. However, this forecast includes the authorities' plan to transfer close to RM22 billion (around two per cent of estimated 2016 GDP) of federal government debt to the Public Sector Home Financing Board,” it added.
Najib said the transformation undertaken by Yayasan Khazanah scholars, mirrors in some ways, the national transformation that has been put in place for Malaysia.
“Our New Economic Model is of a country that is more competitive, productive and investor friendly.
“Under the National Transformation Programme or NTP, the Economic Transformation Programme, works towards Malaysia reaching high income status by 2020.
“The emphasis of the Government Transformation Programme is on improving delivery and ensuring we put the people’s needs first. We have taken bold, innovative steps.
“Some, like the rationalisation and removal of subsidies and introduction of the Goods and Service Tax were not popular, but necessary,” he added.
Najib, who is also Finance Minister, said government initiatives which have been targeting all parts of society, are now seeing results.
He said the bottom 40 per cent households income had experienced a compound annual growth rate of 12 per cent.
The Bantuan Rakyat 1Malaysia payments, he added, had not only benefited those who received it, but also had a beneficial effect on the economy due to the multiplier effect.
“I am pleased to note that a group of 35 leading British economists recently wrote an open letter in a British newspaper, in which they declared that this payment model was a far better way to stimulate growth than interest rate cuts,” he said. Bernama