Economy ‘not so well’ in Q2, says government

The minister in charge of the Economic Planning Unit (EPU) also talked up the country’s chances of maintaining its six per cent growth target for the year.

But his remarks represent a change of tone in the government which was marked by Prime Minister Datuk Seri Najib Razak pointing out earlier today the possibility that the economy could slow down in the second half of the year.

Both the PM and his ministers have generally been bullish about the economic recovery.

Malaysia was also the first in emerging Asia to raise interest rates after the global financial crisis.

It raised the policy interest rate up by 25 basis points to 2.25 per cent in March on grounds that emergency monetary measures were no longer needed because the economy was recovering strongly.

Rates have since been raised once more, by another 25 basis points.

Despite signs that the United States is set to join Europe on the economic slow lane, Nor Mohamed (picture) argued that Malaysia remained on track towards meeting its growth target.

“We certainly can achieve the six per cent (growth). The six per cent has also taken into account that the second quarter may not be as good as the first quarter,” he was quoted as saying by national news agency Bernama.

Nor Mohamed said optimism was also boosted by the regional economy which had been doing well.

“We certainly don’t see a double-dip recession in the horizon,” he said.

Malaysia’s economy grew by an impressive 10.1 per cent in the first quarter of this year, marking two straight quarters of growth after three straight quarters of serious contraction last year.