KUCHING: As the global economic outlook remains fluid and increasingly worrying, many governments are aware of its impact towards Gross Domestic Product (GDP) and its outlook for the year ahead.
For Malaysia, the government is maintaining its GDP forecast for the year at five per cent, based on strong domestic demand.
According to Prime Minister Datuk Seri Najib Tun Razak in his announcement on December 21, the country was still on course to achieving a five per cent forecast, barring uncertain circumstances.
He was commenting on whether the government would revise its growth forecast on the back of uncertainties in the global economy.
Should there be a downturn in the external environment, najib believed Malaysia could still achieve the five per cent goal, provided that “we push for stronger domestic demand,” he stressed.
The prime minister also said in order to ensure strong domestic demand, government departments and ministries must achieve a very high rate of spending in terms of development expenditure.
With all the expectations of an unexpected 2012 in store, industry specialists shared their viewpoints on what they expected Malaysia’s GDP was going to be:
Jason Fong
Jason Fong, RAM Holdings Bhd economist
RAM Economics maintains its forecast of 5.2 per cent GDP growth in 2012. This growth expectation is based on the continued strength of domestic and regional (Asian) de-mand.
While we acknowledge that the high degree of external volatility will persist this year, our base case growth scenario assumes that any demand shock in the advanced economies next year will not be as synchronised as it was in 2008 (it is projected that not all the large economies will suffer a recession at the same time).
This is largely due to the fact that the markets have, since the start of 2010, largely priced in a default in certain European countries, and that the financial exposure these economies have, over time, been substantially reduced since then as well.
Mohd Hafiz Noor Shams
Mohd Hafiz Noor Shams, ECM Libra Capital Sdn Bhd junior economist
The GDP for 2012 is likely to be lower than this year due to unsolved problems in Europe and the potential slowdown in China. These two destinations are major trading partners of Malaysia.
It is still early days for an estimate but preliminary estimate lies between four per cent and five per cent worth of growth.
ETP will grow the domestic economy enough, save a really bad recession or slowdown in Europe or China. We don’t expect a recession for Malaysia.
Patricia Oh
Patricia Oh, TA Securities Bhd economist
The economic outlook for 2011 and 2012 remain rather volatile given the global uncertainties ahead.
Moving into 2012, growth may register at 4.6 per cent on the back of the increasing sense of external vulnerabilities involving particularly the EU crisis.
Exports growth will probably slow in tandem with the foreign volatilities.
We expect 2012 growth to continue to be supported by the healthy domestic front and sustain-able labour market condition.
Lim Chee Sing
Lim Chee Sing, RHB Research Capital Sdn Bhd head of research
GDP growth for Malaysia was projected at 5.0 per cent for 2011.
As it turns out, the final outcome will likely be within our expectation (average of 5.1 per cent in the first three quarters of 2011 and a slight moderation to 4.9 per cent expected for 4Q 2011).
Nor Zahidi Alias
Nor Zahidi Alias, Malaysian Rating Corporation Bhd chief economist
For 2012, we foresee a slightly weaker GDP growth perform-ance of between four to 4.5 per cent due to a significant slowdown in export perform-ance following weak global demand for Malaysian exports as well as softer commodity prices.
No doubt that oil prices would remain relatively firm, but a decline in demand for electric and electronic products and lower cpo prices would not likely be able to off-set strong oil prices in 2012.
Softer trade performance would also dent consumers’ enthusiasm and with bnm continuing to rein in the household debt exposure, private consumption would somewhat be adversely affected.