Subscribe in a reader | Subscribe by Email I remember reading our economy experts and politicians saying no recession, economy on recovery road, blah, blah, blah, blah..But today papers splash main news: Economic shrinks 6.2 percent, nearly double the expected 3.5%! Now I wonder if those “experts” were really experts or by-products of some top 50,000 colleges, and whether qualified people are making press statements and holding important positions in administration.
Next problem is whether we can still trust analysis and reports made after this because one trust is lost, difficult to win back. Will economy improve in the second half as mentioned below? Well, have to take it with a pinch of salt because these reports have political connotations attached.
The national economy contracted at 6.2% for the first three months this year compared to the same period last year, due to a global economic slump. Economists had expected only a 3.5% contraction.
Bank Negara Governor Tan Sri Dr Zeti Akhtar Aziz said at a media briefing yesterday that the financial crisis, which peaked last September and led to a general slowdown in economic activity, had taken longer than expected to be resolved.
She said “the deterioration was greater than expected” and that the exports outlook “remained weak”, adding that the outlook for April to June would depend largely on external factors.
However, she expected the second half of the year to see a better economic performance.
According to statistics released by Bank Negara, the large inventory drawdown, particularly in manufacturing and commodity, also contributed to the decline in growth.
It said all sectors, except for construction, recorded contractions year-on-year. The manufacturing sector declined significantly by 17.6% led by a 23.1% contraction in export-oriented industries with the electrical and electronics subsector experiencing a steep 41.4% contraction.
Domestic-oriented industries also experienced a decline of 15.9% due to weakness in both consumer and construction-related subsectors.
The central bank said the services sector was flat following a 0.1% decline due to the impact from sub-sectors closely linked to the manufacturing sector.
It added that the trade surplus remained large at RM32.7bil as the contraction in imports was larger than in exports due to the lower imports of intermediate and capital goods.
