Najib's reminder about M'sia being net oil importer is timely, says MIDF

-A +A

KUALA LUMPUR (Jan 20): MIDF Group said it was "timely" that Prime Minister Datuk Seri Najib Razak drew attention to  Malaysia's position as a net importer of crude oil.

There has often been a “factual misrepresentation of Malaysia” on this, which has often been used by international investors to “partly justify their aversion towards the Malaysian market and economy”, said MIDF group managing director Datuk Mohd Najib Abdullah in a statement today.

“The Prime Minister’s strong reminder of the fact is timely as the markets themselves occasionally require a dosage of reality check,” he said.

Mohd Najib added that the government’s new oil price assumption of US$55 (RM198.63) per barrel was “fair”.

“Although the spot price of crude oil is currently below US$50 per barrel, the market is still volatile and has yet to settle. The crude oil market is still in the process of finding a price equilibrium,” said Mohd Najib.

He also termed the country’s readjusted economic growth forecast of 4.5 – 5.5% as “still healthy”, while noting that too much negativity has been associated with the decline in oil price.

“More recognition should be given to the fact that lower oil price can also be a stimulus to private consumption as it increases the disposable incomes of Malaysians. It is certainly a boon for energy-dependent economies such as China, Japan, Korea, India and Europe, which coincidentally are important markets for Malaysian products,” he said.

He also noted that the government’s move in maintaining its development spending while reducing its budgeted operational expenditure by RM5.5 billion as a “commendable achievement under a scenario of constricted revenue projections”.

“We believe that the government has enough revenue levers to allow it to manoeuvre the 2015 fiscal year successfully. The decision to continue with important infrastructure projects is important to ensure that the productive capacity of the economy expands in line with the expected growth in demand,” he said.

In addition, MIDF lauded the government’s commitment to position small and medium enterprises (SME) in Malaysia as the driver of growth of the economy.

“The government is opening up new business vistas for the SMEs in line with its strategy to intensify private consumption. There will be plenty of construction jobs in the flood-affected areas, while the strategy to intensify domestic sales and consumption will boost the SMEs in the services sector,” added Mohd Najib.

“The announcement by the Prime Minister today will go a long way towards reassuring the international investors that the government is in control in dealing with the global upheavals in the oil and foreign currency markets,” he concluded.