Malaysia in recession, may be worse than '98: Goldman Sachs<\/p>\n
Reuters, Kuala Lumpur<\/p>\n
Malaysia is already in recession and the economic slump could
\nget worse in the next six months as consumption slows, Goldman
\nSachs said.<\/p>\n
\"Over the next six months, we believe there will likely be
\nconfirmation that this recession is deeper than that of 1998,\"
\nanalyst Adam Le Mesurier wrote in a report obtained by Reuters on
\nMonday.<\/p>\n
Malaysia's economy has slowed for two consecutive quarters,
\nhurt by faltering export revenues and investments from the United
\nStates.<\/p>\n
Gross domestic product (GDP) grew 0.5 percent in the second
\nquarter and 3.1 percent in the first quarter, well below the 8.5
\npercent growth achieved in 2000.<\/p>\n
Third-quarter GDP is due to be unveiled on Thursday.<\/p>\n
The slowdown comes barely three years after the country slid
\ninto its worst recession in decades following the onset of the
\nAsian financial crisis in 1997.<\/p>\n
The GDP data released by the government are not seasonally
\nadjusted, leaving economists split on whether the country had
\nentered recession this year.<\/p>\n
But Goldman considers Malaysia to be in a recession, it said
\nin its latest review of the country's economy.<\/p>\n
\"On a nominal growth basis, the swing in nominal GDP growth is
\nalready the largest on record,\" the research house said. GDP
\ncontracted 7.5 percent in 1998.<\/p>\n
Goldman has cut its forecast for Malaysia's GDP to 1.0 percent
\ncontraction in 2001 from 0.4 percent contraction previously, and
\nto 1.0 percent growth in 2002 from 2.3 percent growth previously.<\/p>\n
\"The main difference between now and 1997\/98 is the degree of
\nthe export sector's downturn,\" Goldman said.<\/p>\n
It said the value of the country's exports on a year-on-year
\nbasis, measured over a ten-year period had fallen significantly.<\/p>\n
\"The 1997\/98 period represented a pause in the export sector's
\nexpansion rate, whereas today exports are contracting
\nsignificantly,\" it added.<\/p>\n
Slowing consumption, as measured by factors including car
\nsales and house mortgages, would lead to higher deflationary
\npressures on the economy, making it harder for the government to
\nabandon its fixed exchange rate regime if it needs to, the
\nresearch house said.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/malaysia-in-recession-may-be-worse-than-98-goldman-sachs-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}