It pays for Malaysian economic managers to continue to put their ears to the ground as far as the economy goes. Reuters has reported on 8 October 2009 that Malaysia’s exports in August fell dismally by a larger-than-expected 19.8 per cent from a year ago, government data showed today. Economists polled by Reuters had expected a fall of 17.4 per cent.
“While the global electronics sector is showing recovery signals, a rebound could very well be built on short-term foundations of inventory restocking. We remain conservative in our exports outlook and the latest trade data further affirms that.
"Month-on-month figures saw some correction from the previous positive pace. On monetary policy, Bank Negara is likely to keep to the status quo in the near term given the stage of economic recovery,” said Joanna Tan, an economist with Forecast Pte Ltd.
“While the fall in export value of commodities continue to be the main drag on Malaysian exports, electronics exports should also continue to be lackluster,” said Alvin Liew of Standard Chartered.
“While the export decline is likely to continue easing in late 2009, Malaysia’s manufacturing sector may not be out of the woods yet, especially if the global recovery is prolonged and shallow. A more worrying aspect of sharply declining imports is that they imply that companies may be delaying capital investments.
"This would reduce the capacity of Malaysia’s manufacturing sector in the medium and long term, preventing it from reaping the benefits of an eventual recovery in demand,” he added.
Irvin Seah of DBS said, “I think this is certainly a disappointment and a sober reminder that the path of recovery is never a smooth one and it will be bumpy. Going forward, as long as the longer term trend is upward then there shouldn’t be a big concern.”
Anyway,let the great economists think their way out of their little corner.
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