By Y. Bhg. Dato’ Mustapa Mohamed Executive Director, National Economic Action Council Distinguished Guests Ladies and Gentlemen Good Morning It is my honour and pleasure to address this distinguished group of analysts and fund managers. For this, I must thank the organizers, Morgan Stanley Dean Witter and ASLI for inviting me to this Malaysian Capital Market Roundtable Discussion. In the past few months we have seen a flurry of forecasting activity among analysts, each trying to outguess the other on how the global and regional economies will turn out this year. There have been several rounds of revisions to GDP growth rates as the US economy took unexpected twists with repercussions on the rest of the world. We have seen growth rates in the region getting downscaled several times. But in recent weeks one gets the feeling that there is growing convergence of views on the global and domestic growth prospects. The broad consensus emerging is that this will be a year to bite the bullet but prepare for a rebound in 2002. In the interim, it is inevitable that we have to put up with difficult times. The question is whether we have the reserves and resilience to withstand this current short but sharp slowdown. Malaysia and Singapore have taken measures on several fronts to mitigate the effects of the global slowdown. But as open economies heavily dependent on exports, there is a limit to what we can do unilaterally to sustain growth at a high level. Our strategy is to keep the fundamentals intact and use the intervening period for bringing about structural reforms in the economy. The State of the Malaysian economy Despite the trying times, the Malaysian economy has managed to avoid negative growth. The economy grew by 3.1% and 0.2% in the first and second quarters of 2001, respectively; making it 1.8% for the first half of the year. At present we expect growth will be higher in the second half of 2001.... [continues]
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