[Pakar ekonomi sedikit skeptik angka terbaru KDNK/GDP kerana Singapura dan Malaysia tidak jauh beda - bagaimana mungkin Malaysia lebih hebat pula? Malaysia dikatakan lebih bernasib baik kerana penduduknya lebih ramai, ekonominya lebih meluas dan ia kaya dengan sumber bumi (gas/petroliam) dan hasil pertanian. Tetapi jangan lupa Malaysia banyak berhutang.... dan NPL dalam bank tidak semakin berkurang... Sekarang timbul pula masalah pengangguran. - Editor]

http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article &cid=FT324U3GQQC&live=true&useoverridetemplate=ZZZUGORQ00C &tagid=ZZZNSJCX70C&subheading=global

Financial Times

Malaysia confounds fears of recession

By John Burton in Singapore

Published: August 23 2001 11:20GMT
Last Updated: August 23 2001 15:52GMT

Malaysia's economy unexpectedly grew by 0.5 per cent in the second quarter from a year earlier, confounding predictions that it was in danger of suffering a recession like neighbouring Singapore. Economists had believed that Malaysia was vulnerable to a recession because it shares Singapore's heavy export dependence amid a weakening US economy and global electronics market.

But analysts warned on Thursday that Malaysia was not out of the woods. "The third quarter could still see a sharp decline. Local technology firms are reporting falling orders," said Lai Tak Heong, research head at SG Securities in Kuala Lumpur. SG Securities has predicted the economy could shrink by 0.5 per cent overall in 2001.

Moreover, some economists raised questions about the claimed growth rate as Malaysia does not seasonally adjust its figures to give a clearer picture of economic trends.

The central bank gave a more positive assessment, saying third quarter growth would match that of the second quarter before rebounding in the fourth quarter. Growth for the first quarter was revised to 3.1 per cent. The central bank, which had predicted growth for this year of 5-6 per cent, said on Thursday it would produce a revised forecast in October.

Economists have pointed to disturbing parallels between Malaysia and Singapore. Singapore's exports to the US accounted for 26 per cent of gross domestic product in 2000 against 24 per cent for Malaysia, while electronics represented 64 per cent of Singapore's exports against 59 per cent in Malaysia.

But Malaysia also enjoys several advantages over Singapore. Its domestic market of 23m people is much bigger than Singapore's 4m population, while its economy is more diversified, with natural resources such as oil, gas and agriculture.

In addition, Malaysia has resorted to increased fiscal spending, unlike Singapore, which has favoured supply-side measures such as tax cuts.

ING Barings recently estimated that Malaysia is spending M$22bn (US$5.7bn) on infrastructure projects, including a M$3bn stimulus package in March. Analysts believe that its full impact on the economy has not yet been felt, while the government is prepared to increase spending further if necessary.

The pump-priming measures, however, could place added strains on the budget deficit, which amounts to an estimated 6 per cent of GDP. In addition, the government may also have to spend more to recapitalise the banking sector if non-performing loans continue to rise.

The government is hoping that increased domestic demand will help balance a sharp slowdown in exports and production. Electronics exports in the second quarter fell 18.4 per cent from a year ago, while electronics production, which represents a fifth of total manufacturing, dropped 25.2 per cent.

Some domestic economic factors remain favourable, with a low inflation rate of 2 per cent and benchmark interest rates at 3 per cent. Malaysians also have one of the highest savings rates in the world.

The challenge will be to encourage consumer spending when unemployment has risen to 4 per cent in the second quarter, the highest rate in two years, due to financial and corporate restructuring. The fear of job cuts and soft local share prices is contributing to a slump in consumer confidence, which has fallen to a two-year low, according to the Malaysian Institute of Economic Research.

The government has tried to reverse the slide in share prices by announcing recent moves to solve debt problems at some of the country's leading companies, such as UEM-Renong and Malaysia Resources, through management changes and the forced sale of assets.

The Kuala Lumpur stock market rose 10 per cent last month as a result of the restructuring measures but it has since languished due to poor corporate results.

Another potential danger is increased pressure on the Malaysian currency, the ringgit, which is pegged at M$3.8 to the US dollar. There has been speculation that Malaysia might have to devalue to maintain export competitiveness.