Domestic economy and commodity prices to push up GNP


GROSS national product (GNP) in current prices is expected to grow at 10.1% annually from 2008 to 2010 in line with the expansion in domestic economic activities and strong commodity prices.

According to the report, gross national savings is likely to grow at 8.9% annually, constituting 37.2% of GNP, despite consumption spending is seen growing at 11% per annum.

Investment, including changes in stocks, is anticipated to be robust and expand by 15.3% per year. Consequently, the resource position is expected to be in surplus at RM292.2bil, or 12% of GNP during the period.

This reflects the country's capacity to finance domestic investment without relying on foreign borrowings.

Meanwhile, high world oil and commodity prices will continue to pressure domestic inflation.

To maintain a stable and low price levels, efforts will be taken to ensure sufficient supply of essential goods and services to meet the growing demand.

These include measures to increase productivity of the food sub-sector, the implementation of the National Food Security Policy and a better distribution network.

The Government will continue to monitor price movements closely while adopting accommodative monetary stance and encourage consumers to practise prudent spending and avoid wastage. It will also adopt market-oriented pricing mechanism in the long-term.

The Malaysian economy achieved a robust growth during 2006 to 2007, driven by domestic demand.

For the remaining Ninth Malaysian Plan period, macroeconomic strategies will focus on enhancing resilience, productivity and competitiveness to sustain the rate of economic growth.

Growth will be accompanied by low inflation and unemployment as well as a healthy external balance and sustainable fiscal deficit.

The private sector will continue to be the growth driver while the public sector will provide the enabling environment.

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