Friday, May 29, 2009

Malaysia In For Rough Weather

Hantu Laut

The GDP contracted 6.2 percent in the first quarter of this year.With two consecutive quarters in decline the country is positively in recession, a scenario refuted by those in government just two months ago, a chink in the armour of the economic intelligentsia, saying what the leaders wanted them to say. Export plummeted 25 percent and private investment declined 26 percent. A hard biting recession is on the horizon.

Malaysia is in the top 20 trading nations, an enviable position for a small nation but could be a huge problem in bad times. A global recession would seriously affect Malaysia's exports.The picture is going to get worse before it gets better.In my December 2008 article here I predicted 2009 GDP of 2 percent and possibly into negative territory.At that time the government was still insistent on growth of 5.3 percent.

The government stimulus package announced earlier seems not to have kicked in making it appears that it has not been implemented as vigorously as promised.In my article here I predicted export would decline by 20 to 30 percent in the first quarter of this year.

It looks like Malaysia is not going to be spared the hard-hitting recession, wrongly predicted by the Governor of Bank Negara and previous second Finance Minister Nor Mohamed Yakcop who predicted recession will not come our way.

If the economy doesn't pick up during the second half of this year there would be a new gloom on the horizon, the banking system may be in for rough weather.The current good liquidity may evanescent quickly if the economy continued with its downward spiral.


Y1 said...

I am no economist but I did say it was unbelieveable that we will be spared recession (by almost everyone in the Government & Bank Negara) when the whole world goes into recession.

The logic is simple. We are not a big country that can consume ourway out of trouble and maintain the economy. And being dependent on export, who would buy from us when most importing countries are in recession?

Why is it so difficult for the authourities to face up with the truth and be prepared for the downturn and hasten to find solutions to rectify the economy? Stop living in denial I say and get on with proper governing.

eddy said...

Bro, as a trading nation Malaysia's recovery from this global economic storm will be very much dependent on the recovery of the economies of America and the European countries. The faster they recover, the faster we recover. Otherwise It think its a long haul and I pray the Government will plan and make the necessary reforms and stimulus packages necessary to pull us through.

For example, I thought the abolishment of 30% bumiputra equity requirement which was lifted for 27 sub-sectors, including health and social services, tourism, transport, business and computer-related services for foreign companies and investors is painful, but necessary decision designed to attract more FDIs. More painful decisions to come I suppose and at the end of this dark tunnel I hope we will as a nation emerge leaner but wiser and stronger economically.

The bedrock of financial and economic management of this country in times of crisis is a strong and stable Government not distracted by the antics of vocal Opposition. I hope PM Najib and BN MInisters will stay strong, stay focused and stay the course in taking this country thru this trying times.

donplaypuks® said...

Yawn! So, what's new?

Rantong said...

Salam ziarah. Such a great blog.

View Profile: Rantong™

SM said...


With two consecutive quarters in decline the country is positively in recession, a scenario refuted by those in government just two months ago?! Really? Hahahaha!
Typical BN Government (Najib) denials lah...if we had beileved what they were saying, we would all be shocked with this latest revelation.
I just feel sorry for the poor Malaysians who believed what the BN Government told them.
Eddy, you are so pro-BN that even with the lies they told us, you still try to blame the opposition?
No wonder they can do "anything" (lie, murder, rape, steal, cheat, & the list goes on) & guys like you will still support them. Unbelieveable!
We as a nation will come out of this wiser & stronger when the Government decides finally NOT to divide us & really & truly have a 1 Malaysia (as long as I have to fill in Government Forms that ask me my Race, we will never be united!).

Hantu Laut said...

This is a free country, anyone can support any political party of their choice.