Monday, June 1, 2009

Malaysia Outlook – Recovery to Begin in 2nd Half of 2009

The Malaysian economy has shrunk by 6.2% in the first three months of the year, its first quarterly drop since 2001, but Bank Negara Malaysia (BNM) maintained that a recovery is due towards the year-end.
Is this optimism well founded? Looking at the various signs of recovery worldwide, it is.
In the UK, house prices unexpectedly jumped by 1.2% in May in a sign the property market slump is easing, Nationwide Building Society said.(See
Japan’s industrial output surged the most in 56 years in April as a rebound in exports helps the economy emerge from its worst recession since World War II. Production rose 5.2% from March, the second monthly gain, the Trade Ministry said in Tokyo. The increase was faster than the 3.3% economists estimated, and companies said they planned to boost output in May and June as well. (See
China’s growth prospects have improved from three months ago, even after accounting for drops in steel and electricity output and the risk of a manufacturing contraction this month, economists’ forecasts show. The world’s third-largest economy will expand 7.5% this year, according to the median estimate of 14 economists surveyed by Bloomberg News, up from a 7.1% forecast in February. (See
India’s economy grew more than expected last quarter, easing pressure on Prime Minister Manmohan Singh to revive consumer demand as he starts his second term in office. Stocks and the rupee gained.
Asia’s third-largest economy expanded 5.8% in the three months to 31 March, matching the revised gain of the previous quarter, the statistics office said in New Delhi. Economists were expecting a 5% increase. (See
Australia’s oil and gas producers propose projects valued in excess of A$200 billion ($160 billion) that may help lead the country out of its first recession since 1991, the industry’s biggest lobby group says. Developing the projects may create 50,000 jobs, yield A$10 billion in government revenue and avoid 180 million metric tons of carbon emissions each year, Australian Petroleum Production and Exploration Association Chairman Eric Streitberg said. (See
More importantly for Malaysia, NYMEX Crude Future was at USD66.41 at 19.20hrs today and WTI Cushing Spot closed at USD66.31 on 29 May 2009.
Considering that the oil and gas industry has been the biggest contributor to Malaysia’s Gross Domestic Product (GDP), these figures, along with other signs of worldwide recovery, show that recovery optimism in the 2nd half of the year is indeed justifiable.

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