I was sharing my thoughts about the property market in Melaka yesterday (Yes, it’s still doing okay of course) and I touched upon the economy. I shared predictions by our Finance Minister, the IMF, the World Bank but before that I asked if there are people who thinks Malaysia will be going into a recession this year (2019). There were a few people who put up their hands. Hmm… Frankly, I do not think Malaysia will be facing a negative growth for 2019 yeah. I think we will continue to grow unless external factors suddenly become very bad. Then, I read about Malaysia’s GDP growth for 2018 as 4.7 percent. I think that it’s pretty good. I am not the only one though. There are many economists saying so too.
Article in Edgemarkets.com here. Alliance Bank Malaysia Bhd chief economist Manokaran Mottain said the 4.7 per cent growth was still considered healthy for a developing country like Malaysia, compared with 4.2 per cent expansion the country recorded in 2016 and 4.7 per cent in 2013. He said, “As long as the growth is still above the three per cent level, the economy may yet to experience a recession.”
Bank Islam chief economist Dr Mohd Afzanizam Abdul Rashid said Malaysia’s economic growth was higher in Q4 2018 compared with 4.5 per cent and 4.4 per cent in Q2 2018 and Q3 2018 respectively, primarily driven by consumer spending which has been growing at above-trend level. He said, “The turnaround in exports to 1.3 per cent in Q4 after contracting 0.8 per cent in the preceding quarter has also helped the overall growth in the final quarter of last year.”
RHB Research Institute economist Peck Boon Soon said that although the overall 2018 GDP growth represented a slowdown in economic activities, it was still considered healthy as it was underpinned by stronger growth in private consumption and partly boosted by three months of tax holiday.
Malaysian Institute of Economic Research (MIER) executive director Emeritus Professor Dr Zakariah Abdul Rashid said last year’s GDP growth could be better, if public confidence was not impacted by the structural reform that took place. He said, “Malaysia is currently undergoing structural reform, so when we decided to do that, the economy will slightly slow down initially, but we will be experiencing more sustainable growth in the long run.”
Meanwhile, Zakariah pointed out that internal factors such as public confidence, especially in terms of the current structural reforms which involved some adjustments in the macroeconomic management, along with external factors like the trade tension between US and China and crude oil prices, would weigh on the GDP to expand at a slower pace of 4.5 per cent in 2019. All these economists actually share even more of their thoughts. Article in Edgemarkets.com here.
I think I have to reiterate the need for a vision of what the country aspires to be. Perhaps the newly formed Economic Action Council (EAC) can provide some inputs and the government of the day is able to decide on our next 20, 30 or even 50 years. Every company needs a vision which the CEO and his team would then start building the momentum towards. This is no different from a country. The PM and his team of ministers would need a vision to do their work on a holistic manner. I seriously believe Foreign Direct Investments are also waiting eagerly for it too. Please do start believing that Malaysian economy needs more work but it is not in ICU! Happy following.
written on 18 Feb 2019
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