Malaysia's Economic Outlook for 2009/10

Hantu Laut

Below is the economic outlook for Malaysia for 2009/10 period forecasted by the Economist Intelligence Unit.

Outlook for 2009-10

• Political uncertainty and instability are unlikely to dissipate in the months ahead, despite an expected orderly transfer of power from the prime minister, Abdullah Badawi, to the deputy prime minister, Najib Razak, in March 2009.
• The leader of the opposition alliance, Anwar Ibrahim, will continue with his campaign to destabilise the ruling Barisan Nasional (BN) government by persuading BN legislators to switch to the opposition.
• The Economist Intelligence Unit expects the BN coalition to remain in power over the forecast period. The BN still has a sufficiently large majority to pass the bulk of new legislation unchallenged.
• Following downward revisions made to our global economic growth forecasts, we now expect real GDP to grow by 3.1% in 2009, down from 4.6% previously. Growth will remain sluggish in 2010.
• We have revised down our forecast for consumer price inflation, which is now expected to average 2.4% in 2009, down from 3.5% previously.
• The ringgit is expected to depreciate against the US dollar in 2009, averaging M$3.45:US$1, before strengthening to M$3.33:US$1 in 2010.
• The merchandise trade surplus will fall to US$32bn in 2009, from an estimated US$39.4bn in 2008, as a downturn in Malaysia's leading export markets lowers demand for a range of Malaysian goods.

I believe the forecast by EIU of real GDP of 3.1% is a bit on the high side.My forecast is from 2% and possibly into negative territory if the government do not increase the stimulus package of RM7 billion and if the global economy shows no sign of improvement during the 1st half of 2009.

The true picture of what to come will only be known by the 1st Quarter of 2009 when the slowdown bites in.

Surprisingly, Malaysian Insider carry what looked like the same report but with completely different figures.If it comes from the same source(EIU) than Malaysian Insider needs a lot of explaining to do why those figures were altered.The Malaysian Insider's article here.