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Franklin Templeton on Malaysia’s economy and deficit

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This is what Franklin Templeton said about Malaysia, in summary. Who is Franklin Templeton? It is one of the world’s largest asset management groups (WIKI) or read about them here.

Malaysia has progressively narrowed its fiscal deficit, putting in painful measures such as the Goods & Services Tax (GST), reducing fuel subsidies and diversifying its economy. (Yes, if Malaysia’s revenues were solely dependent on oil, we might have gone bankrupt)

About the recent Budget 2017, its executive director/head of Malaysia fixed income and sukuk Hanifah Hashim said, “It is a fine balance to strike, but if it is well executed it can provide grease to the economic engine to generate economic activities and boost business confidence.”

About progress towards developed economy, Hanisah shared that since Malaysia has been diversifying its revenue, it continues to show its competitiveness among its emerging market peers. (In my personal view, we are definitely in the top tier of the emerging market peers. Yes, I am confident of my investments within Malaysia)

Other attributes include the fact that Malaysia is still continuing its trade surplus, GDP growth is likely to be 4 percent or higher. IMF projected it at 4.3% in 2016 and 4.7% in 2017. The government says its between 4 to 4.5 percent and Malaysia Institute of Economic Research (MIER) projected the GDP to be 4.2 percent. I could not find a single prediction of GDP Malaysia being negative, yet. BNM is expected to continue its accommodative stance and Franklin Templeton expected one more overnight policy rate cut. (Yes, this is the reason why US$ is rising in value versus Ringgit. The Fed is expected to INCREASE their rates… whatever)

By the way, if Malaysia’s economy is about to fail, it’s best not to touch any property. It is suicidal. If Malaysia’s economy is doing extremely well, we may not get the chance to buy at a good value. It may be a clever move to buy when it’s more neutral perhaps, when Malaysia is nowhere near bankruptcy and no one is queuing to buy in every property launch. (I have never queued then, now and in future. With so many new launches and transparency of information, let’s just buy objectively.)   Happy reading.written on 24 Oct 2016

Next suggested article:   Fitch: Malaysian banks are on negative outlook

 

 

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