Malaysia can grow 5% and handle debts: LGE

HONG KONG: Finance Minister Lim Guan Eng (pix) said today that Malaysia can sustain 5% annual economic growth as the new Pakatan Harapan (PH) administration reviews mega projects and copes with hefty debts left by the previous government.
In August, Malaysia cut its 2018 growth forecast to 5%, from 5.5%-6.0% and reported a much slower second-quarter expansion of 4.5%, compared to the previous period's 5.4%.
Slower growth also signals the economic risks facing the PH government led by Prime Minister Tun Dr Mahathir Mohamad in southeast Asia's third-largest economy.
Lim, who was attending the CLSA Investors' Forum in Hong Kong said that there is an urgent need to review expensive development projects because Malaysia does not have "enough money to pay for them".
"We want to see reductions (in debt) over the course of three years and at the same time we are able to service these debts, we will not be in default," Lim said.
"When we are talking about belt-tightening, cost rationalisation, then we are doing it."
Lim who will oversee PH's first budget in November said it will not run a deficit.
On the need for tough fiscal measures, Lim said, "It's painful, but it's necessary ... I'm willing to be the most unpopular Finance Minister in Malaysian history."
The minister said Malaysia will not be a victim of the contagion effects from emerging markets due to its strong trade and current account surpluses and high foreign-exchange reserves.
"I think that would put Malaysia off the radar as far as being a victim of the contagion effects from ... so-called emerging markets currency risk. I'm still confident that we should be able to ride out the storm if any." Reuters