Malaysia’s modest GDP growth for 2017

Remember the news about Malaysia going into a recession in 2018? Read here: Recession in 2018 for Malaysia, most sectors down Well, that’s 2018’s prediction. What about 2017? In an article in themalaymailonline.com, the gross domestic product (GDP) growth for 2017 is in the positive territory. ,This is what World Bank Senior Economist for Malaysia Rafael Munoz Monero said, “The government has also been pushing for infrastructural projects, which counter-balance the declining private investments.” In brief it meant that growth is continuing through the government’s infrastructure push. (MRTs, LRTs and more) Economists are predicting that Malaysia will record a modest growth of between 4.2 per cent and 4.3 per cent for 2017. This growth will be driven by domestic demand and infrastructural projects. Monero added that the improving commodity prices is also a boon forMalaysia.

This afternoon, one colleague was telling another colleague that times are bad. There are so many leftover mandarin oranges unsold. It’s price throwing currently. Another colleague concurred and said, ‘Yes, even the dried meat also the same. So many stalls still have so much stock. Usually just before Chinese New Year, all would be sold out.’ In the evening, I read the news that the orders for flowers on Valentine’s day is extremely strong and it has even exceeded the orders from walk-in customers. I think there are today way too many malls and way too many supermarkets, all have mandarin orange stocks. This may explain why there are still so many left unsold currently. I have no answers for dried meat but I know one thing’s for sure, the prices are still going up. If I own a dried meat stall, I would prefer to sell cheaper and quickly sell rather than sell high and having lots of leftovers later on.

I do hope everyone note that property market cannot be running if the economy is stalling. Thus, regardless of what any property expert or guru tells you about undervalued properties, always understand where the economy is heading first. During a real recession, the buyers would not be looking at buying property as their first priority. By the way, the unemployment rate for Malaysia has also gone up very marginally. From 3.4 percent end November, it is now 3.5 percent as at end December. Yes, this is considered a very low number but this is the first sign that we must be aware off as it triggers a lot of things. Without a job, one cannot pay his loans. When many people could not pay their loans, the Non-Performing Loans for banks would increase. When this increases, bank becomes even more careful in lending. The vicious cycle would then grow bigger. As of now however, everything seemed fine. Happy following.

 

written on 14 Feb 2017

Next suggested article:   Stay safe, buy within affordability and stop bubble building

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