Published November 10, 2009

Najib sets 6% growth target after recession

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(KUALA LUMPUR) Malaysia will target average annual economic growth of about 6 per cent when the nation recovers from its recession, less than the pace needed to achieve the country's development goal, Prime Minister Najib Razak said.

'I have to be realistic because things are getting more and more difficult for us to achieve a higher growth rate,' Mr Najib told reporters in Putrajaya, outside Kuala Lumpur yesterday.

Malaysia's economy needs to grow 9 per cent annually to reach its target of being a developed nation by the year 2020, the prime minister said in a prepared speech earlier yesterday.

He said in August gross domestic product needs to expand 8 per cent a year over the next decade to meet that goal.

Asian nations from China to Singapore are recovering from the worst global recession since the 1930s after policy makers cut interest rates to record lows and boosted public spending to revive growth. Mr Najib said last week Malaysia may emerge from its recession earlier than the government previously predicted as the outlook for growth in the third quarter 'brightened.'

How Malaysia performs will depend on the export market, Mr Najib said. The country's exports slumped 24.2 per cent in September from a year earlier.

'We are not fully recovered from the recession,' he said. 'When the global economy recovers, there will be demand from the West and certainly our manufacturing sector will do better and we can achieve higher growth.'

Malaysia will unveil a new economic model by year-end, with communications and technology playing a greater role, Mr Najib added.

The prime minister said on Oct 23 that Malaysia's US$195 billion economy may shrink 3 per cent this year, less than an earlier forecast for a contraction of 4 per cent to 5 per cent. The government expects GDP to expand as much as 3 per cent in 2010. - Bloomberg