KL trade gap worsens

KL trade gap worsens

KUALA LUMPUR (Reuter): The Malaysian penchant for foreign brand-name clothes and expensive imported furniture is adding to the country's balance of payments deficit, Deputy Prime Minister Anwar Ibrahim said.

"We have been afflicted with expensive taste syndrome, buying imported goods for ourselves, decorations for our house," Anwar, who is also finance minister, was quoted as saying in The Star newspaper on Saturday.

"Last year, 14.2 percent of the country's imports totaling 28 billion ringgit comprised consumer goods. Although the amount is small, the amount is big for Malaysia's population."

Malaysia's current account deficit has worried international investors, concerned over the possibility of a Mexico-type currency devaluation. Mexico was forced to devalue its currency in December 1994 after a high current account imbalance, triggering a financial crisis.

The Malaysian government has forecast that the current account deficit will fall slightly to 17 billion ringgit (US$6.81 billion) this year from 17.82 billion last year, and 11 billion in 1994.