Nor Mohamed: Economy flexible to overcome crises

Malaysia should be able to meet its growth target of 6.5% next year unless a major crisis strikes in the West, said Second Finance Minister Tan Sri Nor Mohamed Yakcop.

He reiterated that the country was able to overcome past crises because the economy was flexible. The strength of an economy was the flexibility to overcome crisis and to implement measures on short notice, he added.

"With all the lessons learnt when crises occurred in 1971, 1986 and 1997, a more diversified economy and the Government having more resources now, we certainly have flexibility to undertake additional measures to generate greater growth in our economy in the face of crisis from the West, as and when it happens," Nor Mohamed told reporters after officiating the Malaysian Newspaper Publishers Association forum yesterday.

In his Budget 2008 speech, Prime Minister Datuk Seri Abdullah Ahmad Badawi projected growth at between 6% and 6.5% next year.

Nor Mohamed said the Government was initially confident with 6.5% but projected it within a range, as it did not know the real implication of the US subprime problem.

Tan Sri Nor Mohamed Yakcop and Star Publications (M) Bhd executive director and group chief operating officer Datin Linda Ngiam (right)

"I am of the view that unless a major disaster strikes in the West, even if there is a slight slowdown, we should be able to grow at 6% and, if the crisis is not that bad, we should grow at 6.5%," he said.

Although Budget 2008 was expected to bring some positive movement on the local share market, the effect had to be measured over a longer period.

The KL Composite Index fell 14.2 points on Monday in reaction to Wall Street's plunge last Friday. There was concern over the drop in US payrolls for August, which may push the US economy into recession.

The Star, September 12, 2007