20100416 0953 Malaysian Economic News.

The government is considering committing the market opening of 27 services subsectors (which were liberalised in Apr 09) to free trade agreements like the Asean Framework Agreement of Services and World Trade Organisation (WTO), the Dewan Rakyat was told. Deputy International Trade and Industry Minister Datuk Mukhriz Tun Mahathir said this step was aimed at providing more confidence to foreign investors and the commitment was also an assurance to the business community. At this stage, investments in the services sector involve projects such as a theme park worth RM1.1bn and tourism services totalling RM17.3bn. (Bernama)

The European Union-Malaysia Chamber of Commerce (EUMCCI) will embark on several initiatives under a three-year project to enhance business dialogue and cooperation in Malaysia's services sector. The three-year project, led by EUMCCI, will be funded largely by a grant from the European Commission with a total budget of €715,000 (about RM3.2m) and the project will focus on four areas -- logistics, energy, environment and green technology, financial services, and information and communications technology (ICT). For this year, the emphasis will be on green technology. (Bernama)

The general insurance and takaful sector is expected to experience premium growth of between 9.0% and 11.0% this year (6.9% in 2009 and 9.3% in 2008), according to ISM Insurance Services Malaysia Bhd. This was in line with the global economic recovery and the increase in domestic vehicle sales, its chief executive officer Carl Rajendram added. (Bernama)

The country can create a competitive market environment for some high-value food products to cater for domestic and foreign markets, said Agriculture and Agro-based Industries Deputy Minister Datuk Rohani Abdul Karim.

• “We are indeed a global food trader as we export to 185 countries and import food items from 130 countries. The food trade has increased from RM17.8bn in 2000 to RM45.7bn in 2008, with 12.5% annual growth,” she added. 
• The ministry was drawing up the new National Agro-Food Policy for the 2011-2020 period. The policy seeks to ensure food security, enhance global competition, increase farmers' income, ensure agro-food sector's sustainable growth and boost food production to meet growing population's demand. (Bernama)

The Malaysian Malay Chamber of Commerce (DPMM) Perlis Chapter has urged the government to stop the Variation of Price (VOP) implementation which it says is oppressive on contractors. President Fauzi Hassan said that although VOP was implemented following a decrease in steel prices, the cost for other materials and labour continued to increase. In Perlis, Class B and C contractors were currently projected to incur losses of RM150,00-200,00 per project and there was 3 projects had been terminated due to VOP implementation. (Bernama)

Malaysia Healthcare Travel Council (MHTC) Chief Executive Officer Datuk Ooi Say Chuan said more Malaysian hospitals should get themselves accredited with the relevant professional bodies and take measures to improve their capacity to enable them to join in the country's medical tourism initiative. It targets 30.0% increase in the number of medical tourist arrivals for 2010. (Bernama)

The government will table the feed-in-tariffs (FIT) for renewable energy power generation bill in Parliament this October, Energy, Green Technology and Water Minister Datuk Seri Peter Chin Fah Kui said. Hopefully, the process can be completed by December or January, he added. (Bernama)

The Malaysian Institute of Economic Research (MIER) has revised its gross domestic product growth forecast for the year from 3.7% to 5.2%, based on improving consumer and business confidence, signs of global economic recovery as well as higher commodity prices. It maintained its 5.0% GDP growth rate for 2011.

• Overall consumer price inflation was expected to grow by 2.2% this year. 
• The overnight policy rate (OPR) is expected to settle at 2.70% by end-2010 as core inflation had been raising faster than overall inflation. Firmer economic expansion will further lift the OPR to 3.25% in 2011. (Bernama)

The Malaysian Institute of Economic Research (MIER)’s Consumer Sentiment Index and Business Conditions Index were higher by 4.6 pt to 114.2 and 5.2 pt to 124.0 respectively in 1Q10. All sector indices recorded modest gains in 1Q, with the exception of Retail Trade Index and CEO Confidence Index. (Benama, Financial Daily)

The Malaysian Institute of Economic Research (MIER) Executive Director Dr Zakariah Abdul Rashid said the ringgit, considered still undervalued, will possibly touch RM3.00 per dollar by year-end. He said the strengthening of the ringgit, is in line with the appreciation of other regional currencies, such as the yuan against the greenback. (Bernama)

Corporate bond default in 2010 is expected to remain low at 0.6%, with a worst-case scenario of 1.7%, RAM Rating Services Bhd Manager for Structured Finance Ratings, Peter Su Chan Chia said. Last year, three issuers defaulted on five debt securities with a rated value of RM394m, translating into an annual default rate of 1.6%. (Bernama)

Malaysia hopes its trade with the United States will soon return to the high levels of previous years after being badly affected by the global economic crisis. Seeking to woo more investments, Prime Minister Datuk Seri Najib Tun Razak drew the attention of the United States-Asean Business Council (USABC) to recent reforms in Malaysia's economic policies to transit from a middle-income to high-income growth. (Bernama)

The European Union (EU) is ready for talks on the Free Trade Agreement (FTA) with Malaysia, says Ambassador and Head of Delegation of the European Union (EU) to Malaysia, Vincent Piket. He said the EU wished to negotiate on all products and sectors, including those which are sensitive within it like agriculture, fisheries along with certain segments of the electronics sector and automotives. (Bernama)

Malaysia has big potential to be a choice investment hub for investors from the United Arab Emirates (UAE) in their pursuit to seek new investment opportunities, particularly in oil and gas, healthcare and construction materials. International Trade and Industry Minister Datuk Seri Mustapa Mohamed says Malaysian companies have the expertise and advantage in these sectors and were prepared to collaborate with the UAE investors. (Bernama)

The New Economic Model (NEM) needs more concrete measures to boost the attractiveness of Malaysia as an investment destination, says the Malaysian Institute of Economic Research (MIER). MIER executive director Dr Zakariah Abdul Rashid hopes the second part of the new economic blueprint will consider including the human development index (HDI). The index, which comes under the United Nations Development Programme, assesses Malaysia as high in ranking at number 66 out of the 182 countries in terms of life expectancy, literacy and gross domestic product per capita. The model, he said, should not restrict focus on income growth but stress performance in education and health. (NST)