But so far, the government has been short on specifics. However, there's little word on exactly how long these projects are to be deferred, whether they will be scaled down, or whether some will be scrapped altogether. These moves came after it became clear that Prime Minister Mahathir Mohamad's earlier tactic of denouncing foreign investors for selling Malaysian shares and ringgit was only scaring more of them away. Now economists say much depends on how far the strong-willed Dr. Mahathir is willing to let pragmatism take over. Nobody's saying the economy won't continue to expand.
Many economists say the government's current account projections sound optimistic.
For one thing, earnings sent home by the many migrant workers in Malaysia are expected to make up a hefty four billion ringgit outflow this year, judging by the one billion ringgit they repatriated in the first quarter. He puts some of the blame for investors' bearish sentiment on the government's initial missteps in handling the stock-market and currency crises. As for the ringgit, analysts say they don't expect that to recover to its pre-crisis level of around 2.50 ringgit to the U.S. dollar any time soon. The ringgit is likely to trade next year between 3.40 and 3.80, says Mr. Loh. That means inflation is likely to creep up too.