In the papers today (excerpt):
Why Malaysia won’t go bankrupt
The Government is not in dire financial straits right now. By all measures its finances are good, but as in any situation involving finances, this is not to say it cannot be better.
I AM frequently asked why I said Malaysia could go bankrupt by 2019. I have had many queries asking for clarification and this has become one of my transformation blues…
I apologise for the lack of posts, but I’ve been very busy this last week and will be busier still this week. BNM will be releasing their 2011 annual report this Wednesday and very likely we’ll see a reassessment of the government’s 2012 growth forecast of 5%-6% – watch this space.
In the meantime, here’s something that’s been on my “must blog about” list for the past week – I’ve taken the liberty of reproducing the entry in full:
IMF Unveils Template for Computing Structural Fiscal Balances
The IMF has created a new online template to help countries form a clearer picture of their true budget position and, as a result, get a better idea of how much they can spend or save.
The innovation is now more relevant than ever as many advanced economies strive to bring debt down to sustainable levels. In the following interview, Abdelhak Senhadji (Assistant Director), Iva Petrova (Economist), and Marcos Poplawski-Ribeiro (Economist) of the IMF’s Fiscal Affairs Department talked about what the tool does and how it can help policymakers.
Not for the numbers, they aren’t that encouraging…in fact they look downright bad. But rather DOS is slowly but surely rolling out seasonally adjusted numbers that account for the peculiarities of the Malaysian calendar. It started last year with the trade numbers, and this month we’ve got a seasonally adjusted IPI. Thumbs up guys.
If I have a complaint, the English notes on DOS’ seasonal adjustment procedure read like they came out of Google Translator. It’s not laugh out loud funny as some of the Ministry of Defense’s, but still…
Bloomberg/Businessweek had a nice article on income inequality yesterday (excerpt):
Lessons for the U.S. on Inequality
…Yet despite the huge progress against poverty worldwide, inequality—the gap between rich and poor within countries—has been expanding. Recent analysis by economists Isabel Ortiz and Matthew Cummins at Unicef suggests about two-thirds of all countries have become more unequal over the past two decades.
Some days I feel like tearing my hair out. It seems like so many people are living in a past that just doesn’t exist anymore. It’s one thing for a layman not to grasp the intricacies of macro-economics – but its quite another for analysts and economists to make basic mistakes. And even worse if its a policy maker.
I fully understand how Hafiz Noor Shams feels.
The Governor’s remarks from yesterday (excerpt, emphasis added):
OPR at 3% very ‘accommodative,’ says Zeti
KUALA LUMPUR: The overnight policy rate (OPR) at 3% currently is accommodative but will keep tab of inflationary risks, Bank Negara said.
Speaking on the sidelines at the EU-Malaysia Chambers of Commerce and Industry's Quarterly Financial Panel Discussion, Bank Negara governor Tan Sri Dr Zeti Akhtar Aziz said: “The benchmark interest rate at 3% is very accommodative.
Yesterday’s external trade report showed Malaysia’s exports following the regional trend (log annual and monthly changes; seasonally adjusted):
From Businessweek yesterday (excerpt):
Why China Is Suddenly Content with 7.5 Percent Growth
For years, there’s been one constant for people talking about the Chinese economy: GDP growth would exceed 8 percent. It didn’t much matter what happened in the rest of the world—the U.S. and other export markets might be thriving or might be struggling, but China would grow at least 8 percent, year in and year out. The country needed to create enough jobs for the millions of young people entering the workforce every year, and the Chinese leadership decided that anything below 8 percent would put job creation in jeopardy...
There’s a lot of criticisms aimed at the ETP’s (actually the NEM’s) income targets – I’ve been one of them, at least insofar as how it’s been discussed publicly is concerned. One of the bigger issues is the fact that the target’s really nominal income in USD, but everybody talks about the real (inflation-adjusted) growth in Ringgit.
So, setting the record straight (excerpt):
Minister Idris Jala invites you to write to help to build M'sia
…The first thing I would like to explain is the concept of income, which is key to the entire concept of transforming into a high-income country. At what level of income do we become developed and achieve high income? How do we do it? How do we measure this? And can we achieve it?
No details yet, but the National Wages Consultative Council has submitted their recommendation (excerpt):
KUALA LUMPUR: The Government has decided on the national minimum wage and the details will be announced by the Prime Minister.
Deputy Prime Minister Tan Sri Muhyiddin Yassin, who disclosed this, said an agreement had been reached between various parties and the Human Resources Ministry…
With the next Monetary Policy Committee meeting due exactly one week from today, it’s nice timing to have January 2012 data on hand to give us an idea of what likely moves are in store for monetary policy.
The bottom-line: nowhere fast. I don’t see anything that would prompt BNM to either cut rates or raise them. If anything, I’m starting to think the bias will be towards a rate hike going into the end of the year.
But that’s getting ahead of myself.
I had to snigger when I read this (excerpt):
IRB's 26% increase in collection "extraordinary," says PM
CYBERJAYA: The success of the Inland Revenue Board (IRB) in raising collection by 26.79% last year was an extraordinary achievement, Datuk Seri Najib Tun Razak said.
The Prime Minister said IRB's success in collecting RM109.674bil last year not only enabled the government to provide numerous services to the people, but also a stimulus to the private sector to increase their investments.
He said it would also give confidence to investors in the domestic market after evaluating the methods of managing the national economy, because in the current global era, the global market place factor was most crucial.
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