Malaysia's economy is expected to strengthen further in 2006, due to more favorable global conditions, Malaysian National Bank Governor Zeti Akhtar Aziz said on Wednesday.

"Real GDP (of Malaysia) is projected to grow at a faster rate of 6 percent, driven by strengthening export performance and resilient domestic demand," the chief of Malaysia's central bank told a press conference as she released the bank's annual report for 2005.

The global semiconductor upturn, sustained global growth and higher prices for primary commodities are expected to have positive influences on Malaysia's exports, as well as private consumption and investment, Zeti said.

Malaysia's exports of manufactured goods, particularly computers and semiconductor products, are expected to see a stronger growth due to the favorable global conditions, she said.

Domestic demand would be driven by private consumption as a result of rising income and other factors, while private investment is expected to expand, particularly in the manufacturing sector and the oil and gas industry.

On the supply side, except a rosy growth in the manufacturing sector, the service sector is also expected to sustain its strong performance spurred by stronger trade, consumption and business activities, she said.

The commodities sector is expected to see a broader growth this year as the country's production of rubber, crude oil and other agricultural products rises.

According to the preliminary statistics by the bank, Malaysia's economy expanded by 5.3 percent in 2005 due to the government's supportive macroeconomic policies, stronger global growth and favorable financial conditions.

The private sector remained the main driver for the growth last year in the country, the bank said.

Source: Xinhua