Malaysia Economics In A Nutshell
First quarter 2006 GDP growth was a significant 5.3%, mainly driven by the private sector (manufacturing and services), and supported by the agriculture sector. Though palm oil prices was softer, but was helped by strong rubber prices and strong growth in livestock, forestry and fishing.
Latest exports figures for April 2006 came to RM46.3 billion ( US$12.5 billion), which was 6.3% higher on a year on year basis but 9.7% lower on a month to month basis. The m-on-m is less significant, and we should pay more attention to the y-on-y figure to flush out the seasonal effects. Imports was also higher by 11.4% y-on-y but lower on a m-on-m basis by 6.2%. The April figure was lower than March mainly due to declines in the exports of electronic and electrical products and LNG (liquefied natural gas) and crude petroleum.
ASEAN continued to dominate Malaysia’s total exports by absorbing 27.2% of total exports, or RM12.61 billion. The other major export destinations were the United States of America (19.9% of total exports); the European Union (12.3%); China (8.1%); Japan (7.7%); Hong Kong (4.5%); and West Asia (2.9%).
ASEAN continued to be Malaysia's major source of imports in March 2006 with a 22.8% share to total imports. This was followed by Japan (13.7%); USA (12.7%); the European Union (11.7%); China (11.2%); South Korea (6.6%); Taiwan (5.2%); and West Asia (4.6%).
The international reserves of Bank Negara Malaysia (BNM) stood at RM289.5 billion (US$78.7 billion) as at May 31 2006, the Central Bank noted in its statement released on May 7 2006. The central bank added that at this level, the reserves position is adequate to finance 8.2 months of retained imports and is 6.5 times the short-term external debt. Fairly decent figures.
Bank Negara Malaysia governor Tan Sri Dr Zeti Akhtar Aziz said the central bank will not revise Malaysia’s growth forecast of 6% this year, although gross domestic product (GDP) in the first quarter was 5.3%, export growth slowed down in April 2006 and the ringgit continues to strengthen. 5%-6% is very decent considering a much stronger ringgit throughout 2006.