Date: 11 October 2011
KUALA LUMPUR, 11 OCTOBER, 2011: The government’s target to achieve economic growth of five to six percent next year is ambitious, says independent think tank Asian Strategy and Leadership Institute (ASLI).
ASLI chief executive officer Datuk Dr Michael Yeoh said with the difficult global economic situation, especially in Europe and the US, many private economists tend to think the growth next year would be between four to five percent, lower than the government's forecast.
However, he said, whether the target is achievable or not will depend on the global economic situation which determines export, and private consumption which determines domestic demand.
If domestic demand is strong, the growth might be close to the targeted five percent, but to go to six percent is a bit hard, he told reporters on the sidelines of the Economic Freedom Network Asia 2011 Conference here today.
"The Economic Transformation Programme will help to stimulate private investment and hopefully with the increase in private investment will drive greater private consumption. And I think the increase in public servants' salaries will also drive up domestic consumption next year," he said.
Amid the uncertainty of the global economy next year, Yeoh said intra-Asean trade and trade with China, which has grown substantially, may cushion a little of the declining export to Europe and the US.
Meanwhile, ASLI's Centre for Public Policy Studies chairman Tan Sri Dr Ramon Navaratnam said the target growth for next year is optimistic but the government needs to have an altenative plan if the target cannot be achieved.
He said economic and budget planning, as well as the situation in Europe and America, must be carefully monitored.
"If there is a sign of the European and American economies sliding further, we must take counter action," he said.
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