RATING Agency Malaysia Bhd (RAM) has revised upwards its gross domestic growth (GDP) projection for this year to 4.8% from 3.8%, based on the resilience of the economy and more positive outlook for the second half.
Growth momentum was expected to pick up more strongly next year for which RAM had adjusted its GDP forecast to 6.3% compared with the previous 6%, RAM said in a statement.
Underpinning the brighter short term economic prospects are sustained price stability, build-up of foreign reserves, low unemployment rate and improved balance sheet strength of the banking and corporate sectors.
Meanwhile, key concerns are seen shifting towards the need for government fiscal consolidation, management of excess liquidity and pace of industry and services upgrading in response to intensifying global competition for exports and capital flows from China and emerging economies.
Though the short term outlook has improved considerably, sustenance of the economy's 7% per annum growth trend over the medium term will depend will depend on the success of the private sector in implementing productivity and innovation-driven strategies and an increasingly competitive global environment.
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