Friday, January 7, 2011

Outlook for BN Government in Malaysia Positive - CIA Report

Highlights of CIA’s Outlook on Malaysia 2011- 2015

Outlook for 2011-15

* The ruling Barisan Nasional (BN) coalition is expected to maintain its hold on power in the coming five years, securing a victory at the next election.

* The Economist Intelligence Unit expects the BN, which is controlled by its largest component party, the United Malays National Organisation (UMNO), to call an election as early as 2011, two years before its current term ends.

* Fiscal policy will be tightened gradually during the forecast period (2011-15) as the government strives to balance its budget by 2020. Monetary policy will also be tightened as domestic demand strengthens.

* The economy is expected to resume a fairly stable growth path in 2011-15, following a mild recession in 2009 and a strong rebound in 2010. Real GDP growth will average 5% a year in 2011-15.

* The annual rate of inflation is expected to average 3.4% in 2011-15. Government efforts to rationalise the country’s extensive subsidy schemes will exert an upward influence on prices.

* Despite the relatively rapid pace of growth in merchandise imports compared with that in exports, Malaysia will continue to run substantial trade and current-account surpluses in 2011-15.

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