Private investment to drive Malaysian economic growth, says Affin IB

Private investment to drive Malaysian economic growth, says Affin IB
Business & Markets 2013
Written by Ahmad Naqib Idris Adzman Shah of theedgemalaysia.com
Tuesday, 17 December 2013 11:32

KUALA LUMPUR (Dec 17): Affin Investment Bank Bhd (Affin IB) says private investment will be the main driver for Malaysia’s gross domestic product (GDP) growth, supported by the government's Economic Transformation Programme (ETP).

The ETP has unveiled 195 key projects which are expected to generate RM219.3 billion in investments since its introduction in October 2010.

“Supported by strong private investment as the main drivers of economic growth, on a quarterly trend basis, we expect real GDP growth to increase at a stronger pace of around 5.4% year-on-year in 4Q13,” said Affin IB.

For the full year, the research house maintains a forecast of 4.8% for 2013, in line with the current official projection of 4.5% to 5%.

According to the Performance Management & Delivery Unit (Pemandu), the annual growth rate for private investments had tripled to an average of 16% between 2010 and 2012.

This compares to 5% for the period of 2008 to 2010. Private investment is forecasted to grow 16.2% to RM135.8 billion in 2013.

The 2013 forecast surpasses Affin IB's estimate. “This was higher than our current forecast of private investment growth of 15% estimated for 2013.

“We believe Malaysia’s economic growth will become more broad-based in 2014, supported by exports and domestic demand in tandem with the world economic recovery,” said Affin IB.

The government forecasts a 5.5% GDP growth in 2014. Private investment growth is seen at 12.7% to reach RM153 billion.