Malaysia may raise 2010 growth forecast

SINGAPORE: Malaysia may raise its economic growth forecast for 2010 as it expects more investments from the private sector, Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah says.

Currently, the government expects gross domestic product (GDP) to expand by 2 to 3 per cent next year after contracting 3 per cent in 2009.

"I think we still have the space for (higher growth)," Husni told Malaysian reporters here yesterday. He was attending the finance ministers' meeting of 21 Asia-Pacific nations under The Asia-Pacific Cooperation (Apec) summit.

The Finance Ministry is conducting a month of study to determine if the GDP forecast can be higher.



The optimism stems from higher private sector investments. One example was a government-linked company that wants to develop a massive property project in Kuala Lumpur, Husni said, without giving details.

He also met US Treasury Secretary Tim Geithner yesterday and they spoke about general matters, including the US sanction against Labuan-based unit of Iran's Bank Mellat.

First East Export Bank plc was accused of helping to finance the proliferation of weapons of mass destruction, which has been rejected by Iran as baseless.

The move bans Americans from doing business with the bank. However, Husni repeated that the Labuan Offshore Financial Services Authority will ensure the lender caters to legitimate and sound businesses and action will be taken if rules are broken.

At the Apec meeting, Husni said there were mixed views from members on their economic conditions. The consensus is there is recovery and Apec members have promised to work closer to improve the global economy.