Malaysia economy is in good shape

Malaysia debts are currently at 53.70% GDP. It appears to be in good shape.

A country normally can borrow up to 100% its GDP, a very strong industrial country or very financial stable nation can borrow up to perhaps 200% its GDP, debts over 250% GDP the country is bankrupted.

Although the USA has the biggest economy, but the government is not at all rich; in fact, it can't even take out $150bn if asked to now without resorting to borrowing. To date the US government has borrowed $14 trillion.

The UK, likewise, while the people are rich, the government isn’t. The UK government's debt stands at $9 trillion now.

There are only 5 countries with no debt (I.E. 0%): Brunei, Liechtenstein, Palau, Nieu and Macau of China.

Richest governments after 2008-2009 financial crisis:

1. China
National reserves: $2,454,300,000,000
2. Japan
National reserves: $1,019,000,000,000
3. Russia
National reserves: $458,020,000,000
4. Saudi Arabia
National reserves: $395,467,000,000
5. Taiwan
National reserves: $362,380,000,000
6. India
National reserves: $279,422,000,000
7. South Korea
National reserves: $274,220,000,000
8. Switzerland
National reserves: $262,000,000,000
9. Hong Kong , China
National reserves: $256,000,000,000
10. Brazil
National reserves: $255,000,000,000

20. Malaysia / 96,100

The rest are : ( in million US $)

11 Singapore / 203,436
12 Germany / 189,100
13 Thailand / 150,000
14 Algeria / 149,000
15 France / 140,848
16 Italy / 133,104
17 United States / 124,176
18 Mexico / 100,096
19 Iran / 96,560
20 Malaysia / 96,100
21 Poland / 85,232
22 Libya / 79,000
23 Denmark / 76,315
24 Turkey / 71,859
25 Indonesia / 69,730
26 United Kingdom / 69,091
27 Israel / 62,490
28 Canada / 57,392
29 Norway / 49,223
30 Iraq / 48,779
31 Argentina / 48,778
32 Philippines / 47,650
33 Sweden / 46,631
34 United Arab Emirates / 45,000
35 Hungary / 44,591
36 Romania / 44,056
37 Nigeria / 40,480
38 Czech Republic / 40,151
39 Australia / 39,454
40 Lebanon / 38,600
41 Netherlands / 38,372
42 South Africa / 38,283
43 Peru / 37,108
44 Egypt / 35,223
45 Venezuela / 31,925
46 Ukraine / 28,837
47 Spain / 28,195
48 Colombia / 25,141
49 Chile / 24,921
50 Belgium / 24,130
51 Brunei / 22,000
52 Morocco / 21,873
53 Vietnam / 17,500
54 Macau / 18,730
55 Kazakhstan / 27,549
56 Kuwait / 19,420
57 Angola / 19,400
58 Austria / 18,079
59 Serbia / 17,357
60 Pakistan / 16,770
61 New Zealand / 16,570
62 Bulgaria / 16,497
63 Ireland / 16,229
63 Portugal / 16,254
64 Croatia / 13,720
65 Jordan / 12,180
66 Finland / 11,085
67 Bangladesh / 10,550
68 Botswana / 10,000
69 Tunisia / 9,709
70 Azerbaijan / 9,316
71 Bolivia / 8,585
72 Trinidad and Tobago / 8,100
73 Yemen / 7,400
74 Uruguay / 8,104
75 Oman / 7,004
76 Latvia / 6,820
77 Lithuania / 6,438
78 Qatar / 6,368
79 Cyprus / 6,176
80 Belarus / 6,074
81 Syria / 6,039
82 Uzbekistan / 5,600
83 Luxembourg / 5,337
84 Guatemala / 5,496
85 Greece / 5,207
86 Bosnia and Herzegovina / 5,151
87 Cuba / 4,247
88 Costa Rica / 4,113
89 Equatorial Guinea / 3,928
90 Ecuador / 3,913
91 Iceland / 3,823
92 Paraguay / 3,731
93 Turkmenistan / 3,644
94 Estonia / 3,583
95 Malta / 3,522
96 Myanmar / 3,500
97 Bahrain / 3,474
98 Kenya / 3,260
99 Ghana / 2,837
100 El Salvador / 2,845
101 Sri Lanka / 2,600
102 Cambodia / 2,522
103 Côte d'Ivoire / 2,500
104 Tanzania / 2,441
105 Cameroon / 2,341
106 Macedonia / 2,243
107 Dominican Republic / 2,223
108 Papua New Guinea / 2,193
109 Honduras / 2,083
110 Armenia / 1,848
111 Slovakia / 1,809
112 Mauritius / 1,772
113 Albania / 1,615
114 Kyrgyzstan / 1,559
115 Jamaica / 1,490
116 Mozambique / 1,470
117 Gabon / 1,459
118 Senegal / 1,350
119 Georgia / 1,300
120 Panama / 1,260
121 Sudan / 1,245
122 Zimbabwe / 1,222
123 Slovenia / 1,105
124 Moldova / 1,102
125 Zambia / 1,100
126 Nicaragua / 1,496
127 Mongolia / 1,000
128 Chad / 997
129 Burkina Faso / 897
130 Lesotho / 889
131 Ethiopia / 840
132 Benin / 825
133 Namibia / 750
134 Madagascar / 745
135 Barbados / 620
136 Laos / 514
137 Rwanda / 511
138 Swaziland / 395
139 Togo / 363
140 Cape Verde / 344
141 Tajikistan / 301
142 Guyana / 292
143 Haiti / 221
144 Belize / 150
145 Vanuatu / 149
146 Malawi / 140
147 Gambia / 120
148 Guinea / 119
149 Burundi / 118
150 Seychelles / 118
151 Samoa / 70
152 Tonga / 55
153 Liberia / 49
154 Congo / 36
155 São Tomé and Príncipe / 36
156 Eritrea / 22

HSBC S'pore predicts M'sia's economy to expand 7.3%

Driven by strong rebound in exports and soaring commodity prices, Malaysia's economy is expected to expand by 7.3% this year, higher than Bank Negara's latest forecast of between 4.5-5.5%.

HSBC Singapore's senior Asian economist Robert Prior-Wandesforde said there were signs of V-shape vigorous recovery in the Asian trade cycle, resulting in a strong rebound in export figures.

"Malaysia is a trade dependent economy and will be one of the key beneficiaries of that recovery (export)," he told reporters on the sidelines of "Activate Asia: India in Focus".

The revised gross domestic product (GDP) figure was revised upwards from the previous 6.8% forecast last year by HSBC.

Prior-Wandesforde said, "Consumer confidence comprises 8% of private consumption growth in Malaysia. So, I think we are going to see a very broad based recovery in 2010, I would describe as a "sweet spot" for the Asian economic cycle and Malaysian economic cycle."

"What I want to stress here is that Malaysia and Asia as a whole have a momentum of their own. They reached a certain self-sustaining growth phase depending on their policies. What's important is to raise Malaysia's ability to grow on a long-term perspective.

"Ultimately, Malaysia is probably going to grow at 4.5-5.5% on a sustainable basis. It has the potential to improve and some of the reforms the government is talking about, if delivered, will certainly improve growth trend and sustainable growth rate," he said.

Malaysia's first quarter GDP shrinks 6.2% but will improve in the third quarter

Bank Negara Malaysia Governor Tan Sri Dr Zeti Akhtar Aziz said, Malaysia is expected to see a significant improvement in the third quarter this year and a higher degree of positive growth in the fourth quarter that would continue into next year.

Tan Sri Dr Zeti Akhtar Aziz

The economic conditions are expected to improve in the second half of this year supported by fiscal stimulus measures and enhancing access to financing," said Dr Zeti.

Malaysia's first quarter gross domestic product this year contracted by 6.2 % from a growth of 0.1% in the fourth quarter last year but the prognosis for improved economic conditions look brighter in the second half of the year.

Tan Sri Dr Zeti Akhtar Aziz attributed the contraction to the significant deterioration in external demand following the deepening recession in advanced economies.

"Export demand continues to be weak and the environment is still challenging. Despite early signs of improvement, Q2 will be similar to Q1," she said.

The economy was expected to continue to contract in the second quarter, she said.

"However, economic conditions are expected to improve in the second half of this year supported by fiscal stimulus measures and enhancing access to financing," said Dr Zeti.

Husni: 2009 GDP growth to dip below -1%

The country’s economy is expected to contract below -1.0 % this year amid the current economic climate, Second Finance Minister Datuk Ahmad Husni Mohamad Hanadzlah said.

“I cannot tell you (the growth figure) but it will definitely be below -1.0 %,” he said when asked to comment on the projection by economists that the gross domestic product (GDP) will contract between -4.5 % and -5.0 % this year. Bank Negara Malaysia’s GDP forecast for the year is between -1.0 % and %.

Bank Negara will make an announcement on the first quarter GDP tomorrow.

“Wait for Bank Negara’s announcement tomorrow. Prime Minister Datuk Seri Najib Tun Razak will make another announcement the next day on the new forecast growth for 2009 and we will then know the position of the country’s economy,” he said.

Husni, however said that the economy would recover in the third quarter of this year, as the impact of the recent RM67 billion economic stimulus package begins to take effect.

As for 2010, he said the government believes growth would be positive. Asked as to whether there would be more liberalization measures in the near future, Husni said that the government is currently working on the development of new economic model for the country.

“The economic model is in the planning stage,” he said, adding that the government would study which areas should be further liberalized. He said that the key thrust of the new model is the quality of investment and the people.

“Eventually, we will be opening up because we are part of the global system but the process of the liberalization takes time,” he added.

Maybank net profit slipped 34 % lower to RM503.3 million

Malaysia’s largest lender, Maybank, said its third-quarter net profit fell more than a third, and warned that business conditions will remain challenging for the rest of the year.

Maybank

The question arises: Is the net profit slipped is due to the negative impact of the slowdown of U.S. economy or otherwise?

State-controlled Maybank, which made a string of overseas acquisitions, last year, said January-March net profit slipped to RM503.3 million from RM758.6 million a year earlier.

“The highly competitive banking landscape, together with an environment of lower interest rates and more challenging business and employment prospects, could lead to pressure on margins and rising non-performing loans,” said Maybank, which has a market capitalization of about RM38 billion.

Before the results were announced, analysts had expected Maybank to post a net profit of RM2.4 billion for the full year against the RM3.2 billion it made last year.

Ahead of the results, Maybank’s shares fell 1.9 per cent, while the broader market index, KLSE, lost 0.7 per cent. The stock has gained 13.5 per cent this year, but trails the broader index’s 18.1 per cent rise.

Chinese GDP growth slows to 9 % in 3rd quarter

Economic growth in China, one of the fastest-growing economies in the world and the biggest contributor to global growth, slipped to 9 percent in the third quarter of this year.

The slowest pace in China’s economy for more than five years, as industrial production and construction slackened because of weak exports, showing a trend of a slowdown amid the current global financial crisis.

In the third quarter, the gross domestic product (GDP) growth rate slowed down to 9 percent, from 10.6 percent in the first quarter, 10.1 percent for the second quarter and 10.4 percent in the first half of 2008.

China's economic growth has been on a steady decline since peaking in the second quarter of 2007. The slowing world economy pummeled by the global financial crisis and weaker demand for Chinese exports on international markets heavily weighted on the Chinese economy, according to Li Xiaochao, spokesperson for the National Bureau of Statistics.

"However, the Chinese economy has maintained stable and relatively fast growth this year as the 9.9 percent growth rate in the first nine months was still higher than the annual average growth rate of 9.8 percent since China adopted the reform and opening policy in the late 1970s," Li said.

Malaysia not in any financial crisis

Deputy Prime Minister Datuk Seri Najib Tun Razak stressed that Malaysia is not in a financial crisis and should not be talked into one.

However, Malaysia’s real economy would inevitably be negatively impacted by the current financial challenges. Gross Domestic Product (GDP) growth for 2009 would be reviewed downwards from the projected 5.4% in view of the worsening global financial crisis, Najib said.

The Government would also inject RM5bil to double the size of ValueCap Sdn Bhd set up in 2003 to invest in undervalued companies. Foreign Investment Committee (FIC) guidelines would also be reviewed to attract more foreign investors especially in property and commercial sectors.

“While we are confident of the resilience of our financial sector, we are mindful that the financial turmoil in markets elsewhere will bear consequences on the real economies there as well as globally,” he said.

Najib said from the government’s perspective, managing the impact on the real economy was the top priority while it continued to ensure the integrity of the country’s financial system.

He said the global economic slowdown would have an impact on demand for discretionary consumption which formed a portion of Malaysia’s exports.

“Quite clearly, the tradable sectors of the economy will be negatively affected,” he said.

Najib said slower growth, which is beginning to be visible, would result in a slower demand for commodities as evidenced in the softening of commodity prices including crude oil prices.

“The decline in palm oil and rubber prices will affect both the bottom line of our plantation companies and smallholders’ income,” he said.

Therefore, he said, the drivers for sustained economic growth would have to come from domestic private investments and continued robust domestic consumptions.

US faces worse recession than euro zone, warns IMF

The United States could be heading for a significant recession as the financial crisis bites, but the euro area may suffer no worse than an economic slowdown, according to an authoritative new report.


The study from the International Monetary Fund also warned that a banking crisis tends to double or triple the severity of the economic downturn that follows. This underlines the scale of the slump facing the broader economy both in the UK and elsewhere.

It warned that: "The financial turmoil that began in the summer of 2007 has mutated into a full-blown crisis," adding that there is now "a substantial likelihood of a sharp downturn in the US."


The warning came in excerpts of the IMF's closely-watched World Economic Outlook. It may cause some controversy, since a number of euro zone countries are already facing recession, while the US was still expanding in the second quarter of the year.

It contrasts with its comparatively optimistic forecast for the US economy earlier this year, which said that the US would only shrink slightly before bouncing back next year.

However, the report's author, Charles Collyns, warned that it was unrealistic for a country to expect to endure a banking crisis and avoid a major economic jolt as a consequence.


"I cannot think of an example of a country that had a major banking system failure and did not suffer serious economic consequences as a result," he said.

"When the banking system suffers major damage, as in the current episode, the likelihood of a severe and protracted downturn in activity increases."

The report added that in the euro area: "The relatively strong position of households offers some protection against a sharp downturn, despite the appreciable run-up in asset prices and the credit ratio ahead of the current financial turmoil." - Edmund Conway, Economics Editor