Mahathir says GDP growth may exceed 4%

Mahathir says GDP growth may exceed 4%

Agence France-Presse, Kuala Lumpur

Prime Minister Mahathir Mohamad has painted a rosy picture of the Malaysian economy amid recovery of its top trading partner -- the United States, a report said Sunday.

Mahathir, 76, who is also the finance minister was cited by the Sunday Star newspaper as saying that economic growth for 2002 had been projected to exceed four percent.

Mahathir had previously said that the economy was expected to grow by three percent this year while the central bank said it would be 3.5 percent.

The central bank last month said Malaysia's economic recovery was on track with gross domestic product (GDP) rebounding from two quarters of contraction to expand 1.1 percent in the quarter to March.

Inflation remained low at 1.4 percent and the country continued to operate under full employment despite the retrenchment of 10,083 workers in the first quarter, the central bank said.

Mahathir said Malaysia's economic recovery was assisted by the growing confidence shown by foreign investors especially from the United States to be active again in international trade.

"The same is also true for investments in the stock market. Malaysia's credit rating has also improved," he said.

Mahathir said the national economy was now on a sound footing following the effects of the government's strategy in rejuvenating it among others through the opening of new export markets.

Economists had said the growth in the first quarter confirmed expectations of an economic recovery.

"The economy is slowly but definitely crawling out of the slowdown. It is picking up again and this is a confirmation of what we expect," said Nizam Idris, regional economist with Singapore-based IDEAglobal.com.

"I think the economy has done well to diversify -- to spread its growth (dependence) away from manufacturing."