Natural disasters will impact our economy as Japan cut backs on investments and prioritise reconstruction of the nation.
KUALA LUMPUR: Economists are expecting fiscal aftershocks to affect the Malaysian economy following the earthquake and tsunami which hit Japan in last month.
“Bank Negara’s annual report is very optimistic,” said Ramon Navaratnam, former deputy secretary-general of the Finance Ministry.
“Firstly, the natural disasters will lead to a lower demand for imports on Japan’s end. It will also lead to an impact on the world economy, slowing progress globally.”
The well-known economist also said that Japanese investments here would suffer setbacks as their priority would be to reconstruct Japan.
He warned Bank Negara against erring on the side of optimism, advising them to be cautiously neutral.
AmResearch senior economist Manokaran Mottain echoed this, saying that exports would be affected, dropping between 5% and 10%.
Because of this, Malaysia’s GDP growth will be reduced by at least 0.3 percentage points.
“In this regard, we are now projecting the real GDP to be a weak 4% in the second quarter,” he said.
Manokaran, however, said he was confidence that projects such as the ETP (Economic Transformation Programme) and 10th Malaysia Plan would stabilise growth momentum to approximately 6% by the final quarter.
Japan is Malaysia’s third largest export destination, accounting for 10.4% of total exports.
A Bank Negara official concurred that the annual report had not taken into account the earthquake because it had been prepared last year.
“Our forecast is optimistic, but it must be noted that Japan contributes only 8% of global growth.”
KUALA LUMPUR: Economists are expecting fiscal aftershocks to affect the Malaysian economy following the earthquake and tsunami which hit Japan in last month.“Bank Negara’s annual report is very optimistic,” said Ramon Navaratnam, former deputy secretary-general of the Finance Ministry.
“Firstly, the natural disasters will lead to a lower demand for imports on Japan’s end. It will also lead to an impact on the world economy, slowing progress globally.”
The well-known economist also said that Japanese investments here would suffer setbacks as their priority would be to reconstruct Japan.
He warned Bank Negara against erring on the side of optimism, advising them to be cautiously neutral.
AmResearch senior economist Manokaran Mottain echoed this, saying that exports would be affected, dropping between 5% and 10%.
Because of this, Malaysia’s GDP growth will be reduced by at least 0.3 percentage points.
“In this regard, we are now projecting the real GDP to be a weak 4% in the second quarter,” he said.
Manokaran, however, said he was confidence that projects such as the ETP (Economic Transformation Programme) and 10th Malaysia Plan would stabilise growth momentum to approximately 6% by the final quarter.
Japan is Malaysia’s third largest export destination, accounting for 10.4% of total exports.
A Bank Negara official concurred that the annual report had not taken into account the earthquake because it had been prepared last year.
“Our forecast is optimistic, but it must be noted that Japan contributes only 8% of global growth.”
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