LAST_UPDATETue, 17 Jul 2018 10pm

Malaysia's Economic Sovereignty Remains Strong - IQI Chief Economist

KUALA LUMPUR -- A solid balance sheet, political stability, and improved consolidated macro-economic fundamentals demonstrate the sovereignty of the Malaysian economy is on a strong footing, according to an economist. 

IQI Global Chief Economist, Shan Saeed, said the new government had for a start sent positive signals to the market and market participants by forming the Council of Eminent Persons, comprising experienced decision-makers such as former Bank Negara Governor Tan Sri Dr Zeti Akhtar Aziz. 

"She (Zeti) brings huge credibility with her and will expound to the market players how the government will try to move about in its economic strategy.

"She fully fathoms the economic landscape of the country and believes in a free market-based economy with the least government intervention,” he told Bernama News Channel here today.

This, coupled with Prime Minister Tun Dr Mahathir Mohamad's statement that Malaysia was business friendly and welcomed foreign direct investments, was a testament to the new Pakatan Harapan government's clear economic strategy for the sophisticated investors and global players, thus creating greater confidence, he said.

"The strategic intent of the government is to leverage on the monetary policy to spur economic growth rather than pursuing expansionary fiscal policy which might hurt the balance sheet of the government,” he added.

Shan said IQI Global expected the tax-to-gross domestic product (GDP) ratio to exceed 15 per cent in the remaining two quarters of the year. 

By bolstering consumption or aggregate demand to maintain the growth trajectory, GDP growth should hover at the 4.9 to 5.4 per cent level in 2018. 

As for the ringgit, he said it would move in the range of between RM3.75 and RM4.25 to the US dollar this year.