KUALA LUMPUR: DEPUTY Finance Minister Datuk Dr Awang Adek Hussin said Bank Negara Malaysia (BNM)'s economic growth forecast for 2012 at between four and five per cent "is still good" although slower than last year's 5.1 per cent.
Of late, many economists have expressed downside risks to the world's economy due to fiscal drags from the Eurozone's debt-impaired countries.
"It is better to be conservative than to be overly optimistic. We need to factor in uncertainties in the external markets since we made the initial forecast during Budget 2012 six months ago," he told reporters after officiating at Export-Import Bank of Malaysia Bhd (Exim Bank)'s launch of the world's first credit takaful here yesterday.
Awang Adek acknowledged that as a net commodity exporter, Malaysia is exposed to trade fluctuations. But he is confident the central bank has sufficient international reserves to attenuate volatility in the foreign exchange markets to prevent extreme currency movements.
As at March 15 2012, BNM reported that the country's international reserves totalled RM427 billion, enough to fund 10 months of retained imports and four times the short-term external debt.
"Our financial system remains highly resilient and domestic sources of growth are still very strong. Should our economy grow by five per cent from last year, we'll be very grateful to God," he said.
Also present was Exim Bank managing director and chief executive officer Datuk Adissadikin Ali.
He explained Exim Bank's new product named Comprehensive Takaful Shipment protects Malaysian exporters' future payments from overseas buyers via takaful claims.
It adds value to the exporters in securing their financing facilities from the commercial banks. The export transaction must, however, be syariah-compliant.
In view of increasing uncertainties in the export markets, exporters are likely to take up trade credit insurance to manage their risks. "The ability to export on credit terms with insurance will make their cargo more competitive in the international market," he said.
Recently, tighter trade sanctions on Iran spearheaded by the US and European Union to punish Teheran over its nuclear programme has dampened Malaysia's palm oil exports.
Last year, Malaysia exported around 350,000 tonnes of palm oil to Iran. That is about a month's shipment to China, data from the Malaysian Palm Oil Board revealed.
As the bulk of Exim Bank's clientele are commmodity exporters, Adissadikin acknowledged that the sanctions on Iran have had a slight impact on the bank's business.
"Since the end of last year, money cannot be routed out of Iran the usual way. Quite a few palm oil and rubber exporters from Malaysia made claims with us. Although it was difficult, we managed to recover some of the money," he said.
Asked on the bank's business outlook, Adissadikin said Exim Bank had underwritten RM4.5 billion from its 130 policyholders of conventional credit insurance. "Last year, we collected RM20 million in premiums. This year, we hope to achieve a 30 per cent growth," he added.