ING Funds Bhd is confident of the outlook for Malaysia's macro economy, projecting gross domestic production growth of 7.5 per cent this year and 5 per cent in 2011 driven mainly by strong private consumption and private investment.
In a statement yesterday, it said the country's strong private consumption was reflected in the robust take-up rate for new homes and car sales, while retail sales, electricity sales and even traffic on highways were also healthy.
"In addition, the pump-priming activities under the Economic Transformation Programme and the 10th Malaysia Plan are expected to pick up more aggressively over the next one to two years," said ING Funds chief investment officer Philip Wong.
He said the improved ties between Malaysia and Singapore are expected to bring about long-term foreign direct investments from Singapore and the Middle East to the Iskandar Malaysia economic region.
"This should lead to a re-leveraging process with further creations of employment, income and consumer spending," he said.
On the global economic outlook, ING Funds expects growth to be significantly lower next year with a widening divergence in the performance of emerging versus developed economies, high volatility in markets and rising uncertainty over macro economic issues.
It forecast the world's real GDP growth to be around 3.8 per cent in 2011, compared with a forecast of 4.8 per cent for 2010.
For emerging economies, it has projected GDP expansion at 6.5 per cent for next year (2010 forecast: 8.1 per cent), while in the developed world it expects growth at 1.6 per cent (2010 forecast: 2.2 per cent), widening the economic performance gap between the two further.
It also warned that untested policy prescriptions from governments and central banks - which it termed "test tube policies" - could further contribute to significant market volatility. - Bernama
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