KUALA LUMPUR: The 12% hike in electricity tariff is not expected to impact Malaysia's gross domestic growth (GDP) or significantly burden the majority of people in the country.
Second Finance Minister Tan Sri Nor Mohamed Yakcop said Malaysia was on target to register a 6% GDP growth in 2006, compared with 5.3% last year.
“The government has reviewed the tariff hike and feels that it is reasonable,” he said after launching the International Business Owners Survey 2006 (IBOs), a collaboration between Shamsir Jasani Grant Thornton and ECM Libra in which Malaysia was participating for the first time with 29 other countries.
Nor Mohamed said the Ninth Malaysia Plan (9MP) was seeing good progress as a number of projects had started and they should strengthen the economy.
“As we go around the country, there's a feel-good factor among the community and people are very enthusiastic about the 9MP,” he said, adding that there were many projects and programmes to be implemented and the government was doing all it could to improve the nation's delivery system.
On the ringgit, he said, it had earlier strengthened on the back of a weaker US dollar but then the greenback saw a technical rebound and the ringgit weakened.
“But, generally, the ringgit's movement is in line with other regional and international currencies,” he said.
Asked if the ringgit was tied to the Chinese yuan, given that both currencies had risen almost at the same time at one point, he said: “It was just a coincidence. We don't have any such policy of the ringgit being tied to the yuan.”
Nor Mohamed said the local unit was floated against the US dollar and there was a basket of currencies used to measure the ringgit against selective currencies.
“We are not worried about the currencies' volatility. Certainly, the ringgit is not as volatile as it used to during the financial crisis. It is orderly and all in line,” he said.
On IBOs 2006, Nor Mohamed said data from the survey would give input to the government, especially in planning for developments and implementation.
Such input, he said, would be used for the 2007 Budget.
Among other things, the survey showed that businesses in most countries remained optimistic about their economic prospects for 2006. Of the 7,000 companies from the 30 participating countries covered, 150 companies were from Malaysia.
The survey showed Malaysia fared relatively well at 36%, ranking 16th on the optimism level, which was close to the global average of 39%. It also found that 44% of Malaysian businesses were anticipating an increase in employment.
To remain competitive, companies must continuously strive to achieve high performance benchmarked against the best in the industry, not only with players in the domestic market but, most importantly, the global marketplace, said Nor Mohamed.
He added that the survey helped to provide some indication of Malaysia's economic standing against the 29 other participating countries.
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