Malaysia misses growth target

Malaysia misses growth target

Agence France-Presse, Kuala Lumpur

Prime Minister Mahathir Mohamad Sunday said Malaysia would post modest economic growth of 0.5 to 1.0 percent in 2001, down from earlier projections of 1.0 to 2.0 percent.

"Maybe one percent. Of course this is very difficult. Maybe half a percent for this year.

"Next year will be better," Mahathir, who is also the finance minister told reporters at his residence in Putrajaya, just south of the capital Kuala Lumpur.

Mahathir said he hoped domestic consumption would fuel much- needed economic growth.

"We are a trading nation and if the world is not doing well obviously they cannot buy any of the things we produce.

"But we are generating economic growth through domestic activities and we can see that the retail business is very good," he added.

Mahathir said Malaysia's economy was "as well as it can be" considering that the world was going through a bad period.

Economists have said Malaysia can still avoid a recession this year despite a worse-than-expected contraction in the September quarter.

The government last month cut its growth forecast for this year for a second time to 1.0-2.0 percent, and has imposed a range of fiscal measures to boost consumer spending.

Malaysia last plunged into recession in 1998 amid the Asian financial crisis, but it rebounded the following year and recorded a heady 8.5 percent growth last year.

Mahathir said the Malaysian economy was showing some signs of recovery from the initial shock of the Sept. 11 terrorist attacks on the U.S. and that people would start traveling again.

"I believe in one or two months people will be traveling, maybe not in the same numbers as previously but sufficient to contribute to our economic growth," he said.

When asked about remarks by opposition leaders that he would call a snap election, Mahathir said: "We take election very seriously. We just don't call for election because we are in a position to win."

Asked if there was a possibility of an election in 2002 or 2003, he said: "I don't know. It depends. I wouldn't know."

A poll is not due until 2004.