Malaysia 2008 economy worst in seven years (Najib said Malaysia won’t be hit hard ??)

Bloomberg.com: Asia

Malaysia’s economy expanded at the slowest pace in seven years last quarter as exports fell, adding pressure on the government to boost spending to counter a global slump that’s cost thousands of manufacturing jobs.

Southeast Asia’s third-largest economy grew 0.1 percent in the fourth quarter from a year earlier, down from a 4.7 percent gain in the previous three months, the statistics department said in a statement today. Economists were expecting a 1.5 percent increase.

Malaysia’s central bank cut borrowing costs for a third straight meeting this week, saying the risk that the economy will contract in 2009 has risen. The government plans a second stimulus package in March to prevent the country from following Asian exporters including Singapore and Hong Kong into recession as sales of Intel Corp. chips and IOI Corp. palm oil slide.

“External demand collapsed in the fourth quarter, weighing heavily on Malaysia’s externally oriented economy,” said Nikhilesh Bhattacharyya, an economist at Moody’s Economy.com in Sydney. “I don’t believe any fiscal stimulus package can rescue Malaysia from recession. All that it will do is to limit the damage and severity. In this sense it is hugely important.”

The country’s benchmark stock index fell for a second day today and the ringgit declined for a fourth day to 3.7065 against the dollar, the weakest since March 2006. The economic data were released after markets closed.

Bigger Stimulus

The economy expanded 4.6 percent last year, the slowest pace in seven years. The government, which expects 2009 growth to slow to an eight-year low of 3.5 percent, will revise the forecast next month, Finance Minister Najib Razak said Feb. 17. The last time Malaysia posted an annual contraction was in 1998.

The second stimulus, due to be unveiled on March 10, may be as large as 30 billion ringgit ($8.1 billion), Citigroup Inc. said this week. The extra spending may exceed 10 billion ringgit to 15 billion ringgit, Trade Minister Muhyiddin Yassin said in an interview aired today on CNBC.

Najib, who is also deputy premier, is due to replace Prime Minister Abdullah Ahmad Badawi next month and needs to prevent the economic slowdown from fueling public discontent after the government suffered its worst election result in half a century last year.

The government unveiled a 7 billion ringgit plan in November and the central bank has cut its overnight policy rate to 2 percent, the lowest since the benchmark was introduced in April 2004, to bolster local consumption as companies cut jobs amid faltering demand.

‘Tough’ Environment

“The environment this year is going to be tough,” Bumiputra-Commerce Holdings Bhd. Chief Executive Officer Nazir Razak said Feb. 23. The Malaysian bank, which has had four consecutive quarters of profit declines, expects consumer loans growth to slow, he said.

Malaysian Pacific Industries Bhd., the nation’s biggest semiconductor assembler, plans to cut all its 1,700 temporary workers as it expects losses to widen, RHB Research Institute Sdn. said yesterday after its analyst met company officials. Profit at IOI, Malaysia’s second-biggest palm oil producer, has fallen two straight quarters.

Malaysian exports posted their biggest drop in almost seven years in December. Retrenchments in the country’s manufacturing industry jumped 86 percent to 18,578 last year.

Consumer Confidence

“There is a very real danger that Malaysia may witness the self-reinforcing vicious cycles gripping the developed world, where deteriorating job conditions feed into lower consumer confidence and depressed household spending, forcing employers to sack staff,” said Bhattacharyya at Moody’s Economy.com.

The $181 billion economy has “little chance” of avoiding a recession as exports and commodity prices tumble, he said.

Malaysia’s manufacturing industry shrank 8.8 percent in the fourth quarter, compared with a 1.8 percent gain the previous three months. Exports of goods and services plunged 13.4 percent, after growing 5.1 percent previously.

Investment as measured by gross fixed capital formation declined 10.2 percent last quarter for the first time since mid- 2002, the department said. Private consumption growth weakened to 5.3 percent.

Slowing growth will contain prices increases and lead to a continued easing in inflation this year, the central bank said in a separate statement. Malaysian policy makers will continue to focus on ensuring access to credit, it said.

“While global efforts have been intensified to counter the effects of the slowdown, risks remain on the downside and recovery is likely to be slow and protracted,” Bank Negara Malaysia said. “The timely implementation of the fiscal stimulus and providing the necessary policy support to strengthen the domestic sources of growth will also be vital to supporting the overall growth” in Malaysia.

Read:

Razaleigh Slams Government’s Stimulus Package For ‘No Clear Economic Thinking’

Umno-Led Barisan Nasional On The Way Down With The New Crop Of Uninspiring Leadership


Malaysian Anti-Corruption Commission Reeks

Majority Of Malaysians Not Confident That MACC Can Tackle Graft

The Unethics Of Umno – The Utter Hypocrisy Of Umno

Anwar laments inaction by MACC against Mahazir Khalid despite concrete evidence

Malaysia going to the dogs with our ethical levels does not improve

Umno’s ‘defence’ of Perak Sultan raises suspicion

Malaysians disgusted with Barisan Nasional power grab in Perak

Barisan Nasional’s NEP retards national unity, investment and economic efficiency

Only 41% think Najib will be a good prime minister

50 Umno members protest against Malaysian Anti-Corruption Commission’s arrest of party members

Najib, ill-placed to change UMNO, a party that lives on patronage and claims to represent the core interests of majority Malay community

Umno’s humiliation at Kuala Terengganu, the beginning of the end

Umno party-ful of carpet-baggers and ne’er-do-wells still clueless to Malaysian’s rejection

Corrupt, callous and incompetent Barisan Nasional becoming more irrelevant in the new Malaysia political landscape

Barisan Nasional’s pork-barrel politics fail to win Kuala Terengganu

Umno politicians polarizing society to score political mileage

Zaid urges Malays to be wary of leaders who use the name of Malays for political mileage

Dr. Mahathir disgusted that Umno cannot control racism, says Ahmad Ismail should face disciplinary committee

Barisan Nasional government has done poorly in fulfilling Malaysia’s Independence proclamation

Umno – money politics reach worrying levels

Umno conservatives stalling reforms

Umno hegemony is under threat, Malays are not under threat

Umno is a nest of conspirators

Umno lacks intellectual capability, courage, energy to lead

Umno on the way down

Umno rife with corruption

Umno’s formula – turn everything racial

Umno’s day is over until it learns to respect Malaysian people with more dignity


Advertisements
Posted in BN government, khayal, kosong, najib

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Blog Stats
  • 356,123 hits
Pages
February 2009
M T W T F S S
« Jan   Mar »
 1
2345678
9101112131415
16171819202122
232425262728  
%d bloggers like this: