Malaysia

RGE Q1 2010 Malaysia Outlook

Malaysia has lagged other ASEAN economies in recovering from the economic downturn, as GDP continued to contract until Q3 2009. Weak global demand and credit conditions in 2009 led to sharp declines in private investment and manufacturing and commodity exports. Growth and consumer spending are cushioned by monetary policy and large fiscal spending. RGE forecasts that after contracting by 2.4% in 2009, the Malaysian economy will manage to grow in 2010. Private consumption and investment will remain weak while government spending will be scaled back owing to deficit concerns, and net exports will be a drag on growth. Higher commodity prices and inventory restocking will sustain industrial activity and exports in 2010. But both industrial production and exports will remain well below their pre-recession levels in the coming years. With an export-to-GDP ratio of 90%, deleveraging in the West will constrain Malaysia’s growth, though commodity exports to Asia will be a plus. The government has proposed reforms to rebalance the economy toward domestic demand and continue with liberalization and...

Read the Q1 2010 Malaysia Outlook.