Malaysia: Worse is over in April 2009?

I like the show of sheer bravado. I certainly love the optimism. Let us read what Mustafa Mansur,FMM's president has to say.

"There are signs of recovery in the country’s exports with regional trade picking up the slack from traditional export markets," he says.

"Nevertheless, the overall picture for exports is still unstable," he added.

“It’s slowly picking up, we’ve seen some improvement in the third quarter compared to the second quarter this year,” Mustafa told a media briefing at the launch of the National Shippers’ Conference 2009.

“I think we’ve reached rock-bottom and for Malaysia, the worst month for exports was April,” he further added.

He noted that regional trade with the Asean nations, China and India had been instrumental in mitigating the impact of the economic slowdown, adding that “the pharmaceuticals, food and furniture industries have seen improvement in overseas demand.

However he cautioned that the overall picture for exports was still not stable with those in the electrical and electronics industry seeing a rise in demand due to seasonal adjustments for year-end holidays.

He reckoned that based on the more positive economic data currently available, the global economic recession would not continue into next year.

Some economists have warned that the recession would extend to next year if the effects of pump-priming measures wear off or if governments started to withdraw stimulus initiatives.

The Statistics Department’s updated report for the September external trade showed exports declined 1.1% to RM47.2bil month-on-month while year-on-year, they fell 24.2%.

Morgan Stanley Research analysts in a Nov 13 report stated that “exports will show second-order derivative improvement but nonetheless declining by double-digit as Malaysian exports have lagged the region.

Recovery in Asia’s exports-reliant economies such as Malaysia, South Korea, Taiwan and Singapore is largely premised on a better outlook for external trade, which has fallen drastically in 2009.

Singapore’s trade ministry said in a statement yesterday that the recovery of the island-republic’s economy in 2010 was closely linked to global conditions and a slower recovery in demand for exports would moderate growth prospects.

Arent'we all hopeful? I hope the optimism is not misplaced.