'5pc GDP growth possible with private sector's support'

Malaysia may be able to achieve economic growth of around 5 per cent next year if there is support from the private sector, says Tan Sri Nor Mohamed Yakcop, Minister in the Prime Minister's Department.

"It is possible ... that's what we're discussing. If we get the private sector to come and work with the government (to boost growth), we can do it," he said.

The government's official forecast currently is for gross domestic product (GDP) to expand by 2 to 3 per cent next year after contracting 3 per cent this year.

"To increase one or two GDP points is surely within our reach. We can do it," he told reporters yesterday. He, however, declined to give details, saying that the matter is still being studied. He said the government has no plans to introduce a third stimulus package to boost growth. "There's no need for a third stimulus package now," he said.

Its two stimulus packages, the first worth RM7 billion and the second, RM60 billion, have yet to be fully implemented. Nor Mohamed was speaking to reporters yesterday after launching a World Bank report on Malaysia. The report, the Malaysia Economic Monitor, is the first of what the bank hopes will be a series of bi-annual economic reviews on the country.

Vikram Nehru, the bank's chief economist for the East Asia and Pacific region, believes there is no need for Malaysia to withdraw its fiscal stimulus anytime soon as there are no worrying signs of rising inflation or active price increases in the country, unlike some other countries.

"Given the concerns about the uncertainty of the recovery in the global economy, I think it would be too early for Malaysia to withdraw its stimulus now. But the early warning indicators should be watched very carefully going forward," he said.
The World Bank report proposed a four-pillar strategy for Malaysia to achieve its ambition of becoming a developed nation by 2020.

"Malaysia must specialise the economy further, improve the skills of its workforce, make growth more inclusive and strengthen public finances," it said.

Meanwhile, Nor Mohamed said Malaysia will soon formalise a partnership programme with the World Bank that will enable more ministries and agencies to draw on the bank's expertise. On another matter, he said Ekuiti Nasional Bhd, a private equity fund set up by the government, will announce its maiden acquisition of "one or two companies" before March next year.