June 25, 1999
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| June 25, 1999 | atimes.com | |
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| Southeast Asia ANALYSIS: Stronger growth expected for Malaysia SINGAPORE - Malaysia's economy has shrugged off the worst of the recession and should swing back even stronger than predicted with the use of a new base year to measure its annual growth, said analysts here. The move by Malaysia's central bank to replace the 1978 base year with 1987 as the new base year was welcomed by analysts who said it was more reflective of the current status because Malaysia has moved from an agriculture-based to a manufacturing-driven economy. ''But no matter which base is used, it is the same conclusion -the economy is picking up,'' said Neil Saker, head of economic research, of SG Securities here. ''Manufacturing exports are picking up quite well. Domestic manufacturers are reporting better performance driven by the fiscal boost and we've seen the government expenditure going up,'' he added. He noted that SG Securities had revised two days ago its gross domestic product (GDP) forecast for Malaysia from 2.5 percent to 3.1 percent for this year. Malaysia's central bank governor Tan Sri Ali Abul Hassan Sulaiman said day that the once recession-hit Malaysian economy has recovered and would grow by more than 2.0 percent this year. He had announced a strong pullback to a 1.6 percent GDP growth contraction in the first quarter of this year against a reduction of 8.1 percent in the last quarter of 1998 using the 1978 base. A foreign bank analyst said the first quarter result was better than expected, more so because Malaysia's economy was negative only in January but was positive for the months of February and March. ''We are now much more confident, the big picture is better than before. The only last piece of evidence is the loans'numbers. We're watching that very closely and if that comes about, it will be stronger growth this year,'' said the analyst, pointing out that loans' disbursement was still at 2.6 percent against the goverment's 8.0 percent target. The analyst said Malaysia's second quarter growth should be at least 1.0 percent and while capital controls continue to be a factor, it will not affect investors' sentiment badly as before. S&P MMS International emerging market analyst Sani Hamid said many economists would be redoing their sums with the new base. ''What we can expect in the new few days is economists coming out with higher economic forecasts. The revision may be quite steep as there is more evidence that Malaysia's economy is back on track,'' he added. (Asia Pulse/Bernama) | |||||||||
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