World Bank: Malaysia Poised To Achieve High Income Status

03 Jul 2013

Malaysia is well poise to achieving high-income country by 2020, looking by the county’s economic performance thus far, said the World Bank chief economist Kaushik Basu.

“Malaysia’s target to become high income country by 2020 is possible, and the country is capable to be more ambitious by aiming for per capita income of US$20,000 by 2025,” he told Stabiz at the side-lines after the bank launched its “June 2013 Malaysia Economic Monitor: Harnessing Natural Resources” report recently.

The Bank is targeting the Malaysia's economy to grow 5.1% this year.

Basu said Malaysia has shown a robust economy growth over the years and continuously diversifying its economy by spending the revenue derived from commodities into various sectors (eg: manufacturing).

“If Malaysia continues its efforts in diversifying its economy and moving into high-end manufacturing, as well as continue to stress high education and human capital formation, then it is capable to achieve its high income nation targets,” he added.

On the growing concerns over the US Federal Reserved might taper off quantitative easing exercise, Basu said if the measure is taking place, the impact would be temporary.

“The quantitative easing withdrawals hasn’t stated yet, but people are beginning to take position, hence it causes some turbulence in the market and exchange rate depreciation,” he said.

 “The talk on quantitative easing withdrawal is because there is improvement in the US economy. It is not something unexpected because it will happen one day, but the Fed had made it clear that it is going to be sooner than later.

“Any turbulence we see from the measures is expected to be a short-term, which there would be some short term correction measure taken to fight the turbulence,” he said.

Having said that, Basu opined the turbulence in the market would not be translated into a long term situation as the improvement of the US economy would help to mitigate the impact, as exports are picking up in the emerging market.

Source: http://www.thestar.com.my/Business/Business-News/2013/07/03/intan.aspx