Robust local economy, says Zeti

KUALA LUMPUR: The country’s economy will be sustained at the current level going into the second half of this year, supported by the robust domestic economy, Bank Negara Malaysia (BNM) governor Tan Sri Dr Zeti Akhtar Aziz said yesterday.

Source from (The Malay Mail): http://www.mmail.com.my/story/robust-local-economy-says-zeti
Published: Jun 09, 2012

She said the business environment in the country is very supportive with improved level of competitiveness, efficiency and continued access to financing as well as an orderly market to raise funds.

“Banks have remained solid and sound with their favourable profitability, so all these are positive for our economy,” she said when launching the Labuan Financial Services Authority’s annual report.

She said despite the economic crisis in Europe, the central bank is maintaining the growth forecast of 4-5% for Malaysia this year. Zeti said the central bank had already priced-in the effect of the eurozone economic crisis into the forecast.

“In fact, it declined only recently and we had expected the moderation to happen earlier.”

She said BNM is confident of the projected growth range given the robust domestic demand and private investment activities. What is also particularly encouraging is the private sector investment, she said, adding that the sector is expected to contribute to the current growth and future growth.

On the overnight policy rate, she said it has been very supportive of the economic growth. Loan growth has been in the 12% range, indicating that the interest rate level is not an inhibiting factor for the domestic economy’s growth, she added.

Zeti also said the Labuan Financial Services Authority’s (LFSA) operating income for fiscal year ended Dec 31, 2011, rose to RM26.9 million from RM23 million in the same period last year.

LFSA is the regulatory body to spearhead and coordinate efforts to promote and develop Labuan International Business and Financial Centre.

“The growth momentum was sustained in 2011 despite the challenging global environment.”

Zeti said the banking sector saw an increase of 24.1% in total loans to US$24.7 billion (RM78.1 billion) from US$19.9 billion (RM62.9 billion) in 2010 while total assets rose to US$38.3 billion (RM121.1 billion) from US$33.9 billion (RM107.2 billion) previously.

The insurance sector’s total premiums rose 33% to US$1.6 billion (RM5.1 billion) from US$1.2 billion (RM3.8 billion) in 2010 and total assets grew 16.1% to US$3.6 billion (RM11.4 billion) from US$3.1 billion (RM9.8 billion).