Economy to grow 6% to 6.5%

BUTTERWORTH: The country's economy is projected to grow at between 6% and 6.5% this year, Second Finance Minister Tan Sri Nor Mohamed Yakcop said.

He said the projection was based on the unexpected growth of 7.3% during the last quarter of 2007.

"The economic momentum for last year was excellent. It started off with a growth of 4.45% between January and March and ended on a high note.

"We managed to pull through with flying colours in a very tight and difficult international economic condition," he told reporters during his visit to SRJK(c) Lee Hwa here on Thursday.

Nor Mohamed, who was on his campaign trail to win the Tasek Gelugor parliamentary seat, said the high economic achievement showed that the government had taken the right steps to put the country on a strong economic foundation, adding that the inflation rate of the country had been maintained at 2%.

He said investment domestically had also increased to 10.2% compared to 7.9% the previous year.

"Domestic consumption has also increased to 11.7% as against 7.1% in 2006. This shows that the people are spending more and are convinced with our fiscal policy," he said.

Other factors had also contributed substantially to the good results including lower corporate tax that would be further reduced to 25% next year, he added.

"We are confident of achieving better results this year as we are doing everything we can to be a business-friendly government.

"These include lower cost of doing business and a more effective and efficient public-delivery system," he said.

The services sector had also recorded a strong performance with 9.7% growth last year compared to only 4.2% in 2003 and 7.2% in 2006.

"Even the construction sector that recorded negative growth in the past is now performing well with 4.6% growth last year," he said.