Friday, February 3, 2012

What The IMF Thinks About Malaysia In 2012

From the transcript of Monday’s press briefing on the World Economic Outlook Update for Asia, with Anoop Singh, Director of the IMF’s Asia and Pacific Department (excerpt):

Transcript of a Press Briefing on the Economic Outlook For Asian Countries

MS. UTSUNOMIYA: Okay. If I may, the last questions from online. What are some of the external risks you foresee for Malaysia for 2012 when the bulk of the government's transportation program projects will be rolled out, which should boost domestic demand?

And also, briefly, shouldn't Japan's rebuilding process, as well as transfer of some of the production basis out of Thailand, provide growth momentum, too?

MR. SINGH: So on Malaysia, I think we should also recall what Governor Zeti said just, I think, a few days ago -- they're clearly watching it closely. The governor was very clear in her assessment that monetary policy is still accommodative and it is widely accepted that growth will likely moderate a bit this year, and also that the current level of interest rates, in her view, are supportive of growth.

So I think we have a policy framework already in Malaysia that is accommodative of growth, and although we are expecting some moderation of growth in Malaysia, it will still remain certainly close to 4 percent in 2012. We do know also that Malaysia is well-placed to withstand the shocks, and it certainly has sufficient room, as many other countries do, to use monetary and financial policies as needed to provide a great cushion for any greater external downturn.

But the most important point I want to make for Malaysia, as you look at what Malaysia can do to raise domestic demand, it is significant that the government already has a medium-term program, the Economic Transformation Program, which will provide much more support to domestic demand and growth over the medium-term. And that's going to be a significant factor building up Malaysia's resilience and building up its growth momentum in coming years.

2012 GDP growth at 4%, and the ETP will help drive domestic demand. I’m honestly sceptical about both, or rather the confluence of both, as it implies that basically the external sector is going to be pretty bad. I’m working on an update to Malaysia’s growth sensitivity to external conditions, so stay tuned.

[UPDATE: I forgot the link! Clicking the article title will now take you to the original document]


  1. No one is positive on ETP except Najib n Jala.Its a syiok sendiri BAU but dressed in new clothes...n expensively coutoured to bullshit everyone.
    Give an example of a truly new new out of the box initiative...yes nothing.Its what folks hv been planning n doing for ages...improving ffb yields n oil extraction,marginal fields,oil palm derivatives,etc...
    But wat ETP does successfully is to inculcate urgency thereby excusing bad opaque practises n inflated cost as evidenced by MRT n ROL.And the massive govt land handouts.
    By 2015 Pemandu will be in disgrace but all the damage done n irreversible.
    God save us.

  2. Not only Pemandu will be in disgrace, essentially whole malaysians should be in disgrace, we have so much of resources and land, yet no match with our neighbour country - singapore in any areas. Malaysia is really lucky (natural resources) and unlucky (under BN government), if managed by lee kuan yew, maybe we are one of the richest country in the world now.