The Malaysian economy is expected to achieve a modest growth of 5.2 percent this year, the Malaysian Institute of Economic Research (MIER) said Thursday.
The slower economic growth was due to the under-performance in net export in 2011, Zakariah Abdul Rashid, executive director of the independent body researching on economic, financial and business issues, made the remarks in Kuala Lumpur on Thursday.
Malaysia's economy registered a growth of 7.2 percent in 2010, outperforming the initial forecast of six percent. The Malaysian government has anticipated the growth to lie between 5 percent and 6 percent this year.
The export-oriented nation recorded a 10.7 percent growth in its exports in February this year. However, Zakariah said the figure might not be sustainable for the remaining months of the year due to external circumstances.
"Developments in the Middle East, North Africa and disaster in Japan have even aggravated the situation. Perhaps the second half of the year will turn into brighter picture, but in the first half, picture of the external environment is not bright," said Zakariah.
Zakariah also said the growth rate will pick up next year to record 5.5 percent.
On the investment side, Zakariah said it would be bolstered by the implementation of the Malaysian Economic Transformation Program, a program aimed at transforming the country into a high- income developed nation by 2020.
He also expected Bank Negara Malaysia, the country's central bank, to lift the Overnight Policy Rate (OPR) from the current 2. 75 percent to 3.25 percent by end of the year.
Zakariah said consumer spending was already robust in Malaysia and it was not expected to contribute a bigger chunk to the economic growth./.