IMF team says Malaysia economy 'quite okay'

IMF team says Malaysia economy 'quite okay'

Reuters, Kuala Lumpur

A senior International Monetary Fund official visiting Malaysia during the throes of a sharp slowdown declared on Thursday the economy was "quite okay".

A five-member IMF party, who arrived in Kuala Lumpur late on Wednesday, met central bank and Securities Commission officials and Deputy Prime Minister Abdullah Ahmad Badawi during a fact finding visit, which marks the last leg of a four-country tour.

"We don't have any judgment about the economic policies," Indonesia's IMF Executive Director Dono Iskandar Djojosubroto told reporters.

"But we agreed that Malaysia is quite okay compared with other countries like Indonesia...inflation is low, budget is sustainable."

Malaysia's inflation is under two percent, its fiscal deficit is forecast to come down to 5.0 percent of GDP next year, after it was raised to 6.5 percent this year in a bid to reduce the pain of the slowdown, and debt is within tolerable levels.

The IMF team had no other business other than gathering information.

"We are here to listen rather than to talk. We are not a negotiating team," Djojosubroto said.

Two executive directors in the original delegation to tour Vietnam, Cambodia, Thailand and Malaysia had had to return home for some "emergency business", Djojosubroto said.

China's IMF Executive Director Wei Benhua, who heads the delegation, described talks with central Bank Negara Governor Zeti Akhtar Aziz as fruitful.

Malaysia rejected IMF medicine in pulling itself out of a regional financial crisis in 1997-1998, preferring home-grown remedies including a dollar peg for its ringgit currency and the imposition of wide-ranging capital and dealing controls.

Prime Minister Mahathir Mohamad, who blamed currency speculators and hedge funds for the crisis, has previously hit out at the IMF and World Bank as being in thrall to rich nations and their multinational corporations.