Malaysia Economy Outlook 2013
Malaysia Economy Outlook 2013 looks rosy again! Malaysia is the place of growth with great potential for all foreigners with an expected of economy growth of 5% for 2013!
In the second quarter, the U.S. economy grew 2.1 per cent yoy, down from 2.4 per cent in the first quarter. The latest U.S. economic indicators have been more negative than positive. The U.S. manufacturing sector’s PMI fell to its lowest level in three years. The index of pending home re-sales dropped 2.6 per cent in August, an indication that Americans signed fewer contracts to purchase previously owned homes. Consumer spending, the biggest part of the U.S. economy, stalled in August on account of the surge in gasoline prices. U.S. businesses have been hesitant to hire on concerns that the U.S. recovery remains fragile against a backdrop of a worsening of the euro zone crisis, the slowdown in the global economy, and a sharp tightening of the U.S. federal budget next year as the U.S. faces mandated spending cuts and tax increases starting 1st January 2013 if Congress cannot decide by 31st December on ways to reduce the deficit.
The news out of the euro zone had also not been encouraging. The euro zone economy contracted 0.4 per cent in the second quarter and now seems headed towards another quarterly economic contraction. In September, its Economic Sentiment Indicator fell on account of weaker confidence among services and retail trade managers, consumers, as well as industry. In the same month, its PMI Composite Output Index fell to a four-month low of 46.1, which was the eighth month the index has remained below the neutral mark of 50.0. The rates of decline in output were broadly similar in both the manufacturing and services’ sectors.
In the second quarter, the Chinese economy grew 7.6 per cent year-on-year, its slowest pace in 3 years. The pace of its second quarter GDP growth confirms the expectations of many that the current trajectory will take the country’s full-year economic growth to its softest showing since 1999. China is being hit by a “double whammy” of softer domestic demand and slower export growth.
Malaysia Economy Outlook 2013 vs 2012
The Malaysia economy outlook 2012 has been surprisingly resilient. In 2Q 2012, its GDP growth accelerated to 5.4 per cent from a revised 4.9 per cent in the previous quarter. The growth was driven by strong domestic demand, with impressive year-on-year growth in private and public consumption and investment outlays.
The services sectors expanded at an encouraging pace of 6.3 per cent year-on-year in the second quarter. Though the manufacturing sector is increasingly feeling the heat of negative developments overseas, it too expanded at an encouraging pace of 5.6 per cent year-on-year. The construction sector, which is benefiting from the on-going implementation of infrastructure projects, expanded a staggering 22.2 per cent year-on-year. Its percentage point contribution to real GDP growth was however small because of its relatively small contribution to real GDP.
Monthly indicators up to August 2012 indicate that Malaysia’s industrial production could see more contraction in the months ahead. In August, the IPI fell 0.7 points year-on-year, the first dip into the negative territory since July 2011. The Manufacturing Index fell 1.8 per cent, the first since September 2009. And in the same month, exports fell for the second straight month; it fell 4.5 per cent year on year on the back of export declines to ASEAN (-2.9%), China (-10.6%), and the euro zone (-24.2%).
Inflationary pressures remain moderate; in August, CPI data showed Malaysia’s headline inflation growth rate remaining stable at +1.4 per cent year on year, unchanged from the previous month. That’s nearly half the year’s high of 2.7 per cent, which was achieved in January 2012. While the core inflation remains on a down trend, the Food Index rose slightly by 2.8 per cent yoy on account of higher vegetable prices. In the previous month, it rose 2.6 per cent year-on-year.
Malaysia Economy Outlook 2013- The Consumer Confidence
Malaysia Economy Outlook 2013 pointed that consumer confidence is still holding up and is expected to continue holding up going forward, as indicated by the results of MIER’s Consumer Sentiments Survey for Malaysia Economy Outlook 2013. The Consumer Sentiments Index (CSI) ended the third quarter at 118.3 points, 3.4 points higher quarter-on-quarter. Two of the three components that make up the CSI – Current Financial Position and Expected Financial Position – registered qoq gains of 1.1 and 9.0 points respectively while the other – Expected Availability of Jobs – remained unchanged from the previous quarter.
Business conditions and confidence in the manufacturing sector, however, have deteriorated somewhat and could deteriorate further, according to the results of the third quarter MIER Business Conditions Survey. The third quarter Business Conditions Index (BCI) fell 15.5 points quarter-on-quarter to 96.0 points, which is below it’s 100-point neutral level. The Expected Production component of the Business Conditions Index (BCI) fell a significant 18.6 points quarter-on-quarter while the Expected Export Sales component fell 6.2 points.
Of the four MIER’s sectoral indices – Automotive Industry Index (AII), Retail Trade Index (RTI), Tourism Market Index (TMI) and Residential Property Index (RPI) – three came in higher while one came in lower. The AII, RTI, and TMI all rose quarter-on-quarter. Only the RPI ended the quarter lower. All four sectoral indices were above their 100-point neutral level.
On balance, taking into account the results of MIER surveys and the fact that domestic demand remains resilient despite negative developments overseas, we are upgrading our 2012 and 2013 growth forecast for the Malaysian economy to 4.9 per cent and 5.4 per cent respectively.
In summary, Malaysia Economy Outlook 2013 remains bullish, and it is an encouraging sign for all Malaysians as well foreigners to invest in Malaysia.
[Above content released from Malaysia Institute Economy Research]Come and invest in Malaysia! We provide complete business advisory services for all your investment needs. There are many business investment opportunities available in Malaysia for foreigners. Malaysia is a place of growth! Be part of it!