'Diversification key for M'sia to achieve target'
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Malaysia can achieve its growth target of 4.5 per cent this year as it diversifies away from a reliance on external trade, according to International Monetary Fund (IMF) Managing Director Christine Lagarde.
“It is quite impressive to see Malaysia’s gradual transition from an economy that was largely export-led to one that is more balanced between exports, investment and domestic consumption.
“I believe this is a sustainable pattern,” she told a press conference yesterday at the start of her three-country tour of Southeast Asia.
She is on her maiden visit to Malaysia as head of the IMF and will visit the Philippines and Cambodia next.
The IMF’s first female chief added that she was impressed by Malaysia because of two factors.
“The first is the combination of short-term objectives and a much longer-term vision with the identification of those sectors that will be driving the economy forward.
“The second thing is that the country’s economy includes many players from the real economy, whether it is the public or private sector, as well as the financial sector.”
However, she highlighted three risks that Malaysia needed to address, the first being its foreign direct investment, which she said had yet to return to pre-crisis levels.
“There is a need to ask why. Next is the high level of debt and the third is inequality.”
In her speech later, Lagarde said that while the country had held up well so far with growth at above 4.5 per cent, it remained in “risky territory”.
