Malaysia’s New Finance Minister Confident of Stronger Economy
Malaysia’s newly appointed Finance Minister Lim Guan Eng recently stated that the country’s economy remained strong and was backed by sound fundamentals. However, he said there was still a need to improve the fiscal conditions and also iron out other pressing issues. “The country’s economic fundamentals are still strong with the banking sector well capitalised and non-performing loans still low, he said. “In the financial sector, our capitalisation is high and liquidity in the capital market is high. The fundamentals are there but we need to improve the fiscal condition,” he said.
Lim said this when fielding questions by journalists on how the government intends to return confidence to investors given the recent announcement that the current debt-to-GDP ratio stood at 80%. On the fiscal condition, he said they were confident of resolving it and that the economy would emerge even stronger. Bursa Malaysia fell shortly recently as foreign funds continued their selldown of local equity. The FBM KLCI fell 69 points or 3.7% over the two sessions, erasing nearly all its gains so far this year. However, Lim drew attention to the fact that it is not just Malaysia’s equity market that has pulled back in recent days, but other stock exchanges in the region as well due to external factors.
Lim said such a thing was not only happening in Malaysia, but also in countries like Thailand and the United States. “The stocks have fallen in other countries. There are also other international factors (to consider). “Let the stockbrokers and analysts see if this is happening only in Malaysia or regionally and internationally. “We have to be truthful and transparent. If by being transparent we will be punished then there’s nothing we can do about it. We will still continue to be transparent,” he said. He stressed that the new Government will carry out its administration based on the principles of competency, accountability and transparency (CAT). “We want to establish the true baseline on the state of financial affairs, diagnose the problems and then prescribe all necessary remedies,” he added.