MALAYSIAN CENTRAL BANK SEES HIGHER 1987 GROWTH
Gross domestic product (GDP)
growth in 1987 is expected to grow by between 1.5 and two pct,
up from one pct in 1986, the central bank said.
    The forecast compares with the one pct GDP growth forecast
made by the Treasury last October.
    Bank Negara also said in its annual report that gross
national product (GNP) is expected to grow by 3.5 to four pct,
after declining 7.3 pct in 1986.
    It said that a turnaround in investor confidence since last
November had been spurred by a moderate improvement in oil and
commodity prices and a rise in manufacturing exports.
    Growth in 1987 is expected to come from the anticipated
rise in export earnings if the industrialised countries sustain
their average GNP growth at 2.5 to three pct, it added.
    Bank Negara said its forecast assumes that crude oil will
average 15.50 dlrs a barrel, rubber at 210 cents a kilo, palm
oil at 850 ringgit a tonne, tin at 17 ringgit a kilo and a rise
of 12 pct in manufacturing exports.
    It said Malaysia's international terms of trade will turn
around to rise by two pct in 1987 after declining 12 pct in
1986 and five pct in 1985.
    "In 1987, income will be higher, private consumer spending
is likely to recover and expand... The budget will remain under
strict control... The resource gap in the government's finances
on current account will be bridged over the near term," Bank
Governor Jaafar Hussein said in the report.
    The current account deficit is expected to narrow to 1.19
billion ringgit in 1986 or 1.8 pct of GNP from 1.79 billion or
2.5 pct of the GNP the previous year.
    The bank forecasts the inflation rate will increase by 1.5
pct, after its 0.7 pct rise in 1986.
 REUTER
