PENANG: The country's economy is expected to grow at an average of 5% per annum for the next 15 years, Malaysian Institute of Economic Research (MIER) executive director Dr Mohamed Ariff said.
Dr Mohamed said the country’s economy would not be able to grow at 7% per annum as projected by the government.
He said this at a talk on Malaysian Economy: Growth Pro-spects & Issues organised by TEC Asia Centre Sdn Bhd and sponsored by Microsoft.
“The 7% per annum growth is now unrealistic as the economy base has grown and competition has become stiffer in the region.
“The lack of investment from the domestic sector is also a cause of the slower growth pace,” he said, adding that there was foreign investment but it was not coming in fast enough.
Dr Mohamed said that in 2008, a global recession would set in, causing the country's growth to slow down to between negative and zero growth.
“The recession is caused by corrections in the US and China economies. For example, we anticipate the US currency to de-preciate and this will have an impact on its government and public expenditure.
“This will in turn trigger a chain of reactions in the world,” he said, adding that the recession was expected to last for several years.
Dr Mohamed said the Malay-sian Government was selective on the type of foreign investments that came into the country.
“For example, the govern-ment does not encourage the entry of foreign investments that sought acquisitions and mergers.
“The government does not favour foreign investments in-tending to set up labour intensive manufacturing activities,'' he said.