Malaysia announces anti-inflation step<\/p>\n
KUALA LUMPUR (Agencies): Malaysian Deputy Prime Minister Anwar
\nIbrahim has unveiled several measures aimed at containing
\ninflation and said more would be announced in the coming weeks.<\/p>\n
Anwar said Wednesday that the Malaysian government would take
\nstern action against profiteers who hike prices of goods
\nunnecessarily.<\/p>\n
The fast growth of Malaysia's economy, expected to hold to
\neight percent this year for the eighth straight year, has raised
\nconcern among some analysts that the economy may be overheating.<\/p>\n
"The ministry will be very firm and tough and it will take
\naction against unscrupulous businessmen who continue to exploit
\nconsumers," he told reporters after a cabinet meeting.<\/p>\n
Anwar, who is also finance minister, was quoted by Reuters as
\nsaying that the government would remove regulations hampering
\nimports of essential food items such as beef, fish and
\nvegetables.<\/p>\n
It would also increase the supply of medium and low-cost
\nhousing in the country to meet demand.<\/p>\n
Regulations would be eased to allow increased imports of
\ncement to meet demand in the burgeoning construction sector to
\nhold down price pressures, he said.<\/p>\n
Apart from a few measures he detailed on Wednesday, Prime
\nMinister Mahathir Mohamad will also announce more anti-inflation
\nmoves in early June and again on July 1, Anwar said.<\/p>\n
He did not announce any credit controls to limit domestic
\nloans for car and housing purchases as analysts had expected.<\/p>\n
Instead, he said the government was closely monitoring housing
\npurchases by foreigners who bought property in Malaysia for
\nspeculative reasons, pushing up prices.<\/p>\n
Malaysia's government has taken a hawkish stance in a battle
\nto keep inflation below four percent. Last year, it freed import
\ntariffs for more than 500 items and more recently issued stiff
\nwarnings to shopkeepers as public complaints mounted over a spate
\nof post-election price hikes.<\/p>\n
The government also acted swiftly in revoking an electricity
\ntariff hike announced by listed state-owned power giant Tenaga
\nNasional, causing the company's share price to tumble on the
\nstock exchange this month.<\/p>\n
"We don't think it was proper for (Tenaga) to make an
\nannouncement on the price increase two days after the elections,"
\nhe said, adding that the government wants the power giant to cut
\ncosts.<\/p>\n
Inflation averaged 3.3 percent for the first quarter of this
\nyear. It was 3.7 percent for the whole of 1994.<\/p>\n
Growth<\/p>\n
Meanwhile, Rashid Hussain Securities, a top Malaysian
\nbrokerage, said in its economic update yesterday that Malaysia's
\neconomy grew by an annual rate of 9.8 percent in the three months
\nto March, underpinned by buoyant exports and domestic demand, but
\ninflation was still under control.<\/p>\n
Manufacturing continued to lead the way, but overall growth
\nwas lifted by stronger expansion in agriculture and mining
\noutput, said Rashid Hussain Securities in its economic update
\ncompiled by its research unit.<\/p>\n
"Private consumption remained strong, registering sharper
\nincreases in the sales of cars and higher demand for loans for
\nbusiness and consumption," the report said.<\/p>\n
The Malaysian economy is officially projected to grow by 8.9
\npercent this year from 8.7 percent last year.<\/p>\n
Although Deputy Prime Minister Anwar Ibrahim announced no new
\ncredit controls on car or housing loans, he said the government
\nwould not entertain appeals to raise prices, including the price
\nof cement.<\/p>\n
Property purchases by foreigners for speculative purposes
\nwould be closely monitored, he said.<\/p>\n
Rashid Hussain economist Chua Hak Bin said current economic
\nindicators did not yet suggest a need for credit controls or
\nsharp monetary tightening.<\/p>\n
"Inflation remains under control at 3.3 percent for the first
\nfour months of the year, compared with 4.4 percent in the
\ncorresponding period of last year," Chua told AFP.<\/p>\n
Business loans picked up from 9.3 percent in the fourth
\nquarter of last year to 12.2 percent in the first two months of
\nthe year.<\/p>\n
Consumer credit was sustained at a high growth rate of 16
\npercent in the first two months from 16.3 percent in the fourth
\nquarter of last year.<\/p>",
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