Let's look at some facts and numbers given by Aseambankers Research chief economist Suhaimi Ilias.
1. Full-year gross export growth was expected to slow sharply to 3% next year from 10.5% this year.
2. The plunge in commodity prices, especially the 60% decline in oil and crude palm oil (CPO) prices, since their peak this year, would have a severe impact on Malaysian exports.
3. About 75% to 80% of the (16%) export growth in January to August this year came from exports of pure commodities (petroleum, CPO, liquefied natural gas and resource-based products (refined petroleum products, wood and rubber products, chemicals, steel).
4. The impact is already being seen, especially in relation to the fall in commodity prices, as gross exports slowed to 10.6% year-on-year growth in August from the average of 22% year-on-year growth per month between April and July.
5. Import growth is expected to be dragged as well. With imports of intermediate goods - primarily inputs for the export-based manufacturing sector - accounting for 70%-75% of total imports, we can expect overall import growth to be affected. Moreover, the prospect of slower investment activities will also hit imports of capital goods.
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6. Since exports growth was declining due to the slowdown in major economies like the US, Europe and Japan - which account for one-third of Malaysia’s exports - the Government should focus on shoring up domestic demand.
7. Aseambankers expects the upcoming Economic Package to address this issue with measures to boost consumer spending and the enlarged public sector spending (Federal Government and GLCs), support key growth sectors/areas like tourism, as well as raising the competitiveness and attractiveness of Malaysia as a foreign direct investment location.
8. According to estimates by the International Monetery Fund, Malaysia’s total trade exposure, including indirect exposure to the US, measured as exports to the US as a share of Malaysia’s GDP was 31.7% in 2006, as against the direct exposure of 22.7%. For the EU market, total exposure was 25.4% as against 13.8% for direct exports share.
9. The falling ringgit against the USD may act as a buffer against a very sharp decline in export performance.
Any comments?
Still too early on Monday for my brain to get going. Have a read of The Malaysian Insider's report Najib has tough task to boost sliding economy which, in the absence of analysis at this blog, will have to serve as a prelude to his speech as MOF1 in Parliament tomorrow.
1. Full-year gross export growth was expected to slow sharply to 3% next year from 10.5% this year.
2. The plunge in commodity prices, especially the 60% decline in oil and crude palm oil (CPO) prices, since their peak this year, would have a severe impact on Malaysian exports.
3. About 75% to 80% of the (16%) export growth in January to August this year came from exports of pure commodities (petroleum, CPO, liquefied natural gas and resource-based products (refined petroleum products, wood and rubber products, chemicals, steel).
4. The impact is already being seen, especially in relation to the fall in commodity prices, as gross exports slowed to 10.6% year-on-year growth in August from the average of 22% year-on-year growth per month between April and July.
5. Import growth is expected to be dragged as well. With imports of intermediate goods - primarily inputs for the export-based manufacturing sector - accounting for 70%-75% of total imports, we can expect overall import growth to be affected. Moreover, the prospect of slower investment activities will also hit imports of capital goods.
.6. Since exports growth was declining due to the slowdown in major economies like the US, Europe and Japan - which account for one-third of Malaysia’s exports - the Government should focus on shoring up domestic demand.
7. Aseambankers expects the upcoming Economic Package to address this issue with measures to boost consumer spending and the enlarged public sector spending (Federal Government and GLCs), support key growth sectors/areas like tourism, as well as raising the competitiveness and attractiveness of Malaysia as a foreign direct investment location.
8. According to estimates by the International Monetery Fund, Malaysia’s total trade exposure, including indirect exposure to the US, measured as exports to the US as a share of Malaysia’s GDP was 31.7% in 2006, as against the direct exposure of 22.7%. For the EU market, total exposure was 25.4% as against 13.8% for direct exports share.
9. The falling ringgit against the USD may act as a buffer against a very sharp decline in export performance.
Any comments?
Still too early on Monday for my brain to get going. Have a read of The Malaysian Insider's report Najib has tough task to boost sliding economy which, in the absence of analysis at this blog, will have to serve as a prelude to his speech as MOF1 in Parliament tomorrow.
1 comment:
You read that article and then those nice media pieces from the government proxies and a chasm suddenly appears right before you, doesn't it?
Not a single percentage number builds any confidence. In fact the snapshot echoes every concern posted by every blogger in town.
Anyway, here are the usuals:
http://ifile.it/g1r89qa
http://ifile.it/5dlke3m
So it comes down to pump-priming again. Does that mean the roofs of new schools won't collapse by themselves anymore, taking lessons from the last pump-priming?
How is anyone to ensure that when:
- it is election time again;
- money politics is in full swing, and
- ketuanan and NEP are raised again?
So, watch how those pump-priming contracts will be awarded.
Second, apart from tourism which itself may be expected to be affected since it is a global phenomenon we are facing, what other sectors are growing?
Third, "raising competitiveness and attractiveness for FDI" - what does this really mean? Does it coming out now imply that if times are better, we don't raise our competitiveness and attractiveness for FDI? And if the answer to that is no, does it mean what is needed to be done to raise the c&a should also have been done all along from the very beginning? And if the answer to that is yes, why wasn't it done...since everyone knows what it is?
There are no shortcuts to great achievements. They are great because the doer does the right thing from beginning to end, fighting not only the forces of nature but himself to come up and stay up. It requires vision, will and constant improvement. If we only have bats for nipah virus why do we need to console ourselves that this time there will be no silver bullets for vampires?
The last one checked, this is Malaysia, not Transylvania.
i am walla.
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