'Domestic activities, building boom main growth drivers'

DOMESTIC activities and a strong multiplier effect from the construction sector following the rollout of projects under the Ninth Malaysia Plan will be the main drivers for growth this year, said a local research house. It has projected the real economy to expand by 5.7 per cent in 2008, from six per cent in 2007, with private expenditure expected to outweigh public expenditure. Supported by strong domestic fundamentals and further downside risk to the US dollar, Inter-Pacific Research also expects the ringgit to appreciate to between RM3.22 and RM3.25 in 2008, from RM3.35 to RM3.37 in 2007.Inflation is expected to be a cause of concern in 2008, emanating from demand-pull in view of stronger domestic activities, it added. It also expects inflation to hover between 2.5 per cent and 2.8 per cent in 2008, from two per cent in 2007.

(14-1-2008 New Straits Times)