KUALA LUMPUR, Feb 18 — MIDF Research is confident Malaysia will achieve five per cent growth this year, driven by domestic demand which comes mostly from the services sector rather than the manufacturing sector.
Its Chief Economist, Maslynnawati Ahmad, said actually, the country must monitor the economic prospects of China's and Asean's economies because demand would come mostly from them.
She said many people had predicted that the increase in exports would be supported by the recovery in the US economy.
“But in my view, although the US economy is expected to recover, the opportunities or prospects for the manufacturing sector are not that big because the US recovery will be driven by its own domestic demand and it is no longer Malaysia's biggest trading partner,” she said.
Maslynnawati said this to reporters at the Entrepreneurship Malaysia Forum 2014 here today.
She said Malaysia's biggest trading partner, China, would not be facing a hard landing, and its growth would not decline drastically.
“Growing at seven-eight per cent is good for them,” she said.
On the small and medium enterprises, Maslynnawati said although over 90 per cent of them came from the services sector, they could no longer depend on domestic demand.
“The services sector, although its focus is domestically, faces big challenges overseas.
“The government is now negotiating the Trans-Pacific Partnership Agreement whereby 2015, more services sector will be liberalised.
“Thus, although the services sector involves many deals domestically, it has to face the challenges like the entry of many foreign firms, increase in competition and the export of services overseas,” she said. — Bernama
