Private Investment Has Rebounded, Says Nor Mohamed

KUALA LUMPUR, June 8 (Bernama) -- Malaysia no longer needs to pump prime the economy as private investment has rebounded, Second Finance Minister Tan Sri Nor Mohamed Yakcop tells US rating agencies."Our net foreign direct investment (FDI) inflows are higher than most peers in Asia and the private sector is accounting for 46 percent of total investment," Nor Mohamed said."We don't think the ratings reflect the improvements on this front," he said in his opening remarks at a meeting with rating agencies in New York Friday.The meeting was part of the government's efforts to familiarise rating agencies with positive developments in Malaysia in recent years. Text of the minister's speech was made available by the Finance Ministry.Nor Mohamed said rating agencies have previously linked fiscal deficits to the government's need to pump prime the economy."Our decision to continue running sustainable deficits has been taken from a position of strength. Our economy is transitioning towards a services and higher value-added manufacturing base," he said.Under the Ninth Malaysia Plan (9MP) development allocation, the government has chosen to target development expenditure to help accelerate the transition, including in the development of human capital (23 percent), economic services (41 percent) as well as in health and other social facilities and amenities (17 percent), he pointed out.According to Nor Mohamed, the most obvious strength of Malaysia is its external balance sheet with both the public sector and the country being large net external creditors."We run enormous current account surpluses and have ample external resources that can be drawn upon in times of economic stress," he said."Our external debt accounts for 27 percent of exports, while our debt service ratio stands at 4.8. Our international reserves is seven times our short-term external debt," he added.