Finally, the number is out and the number is a good one. 6% growth in 2014, higher than even 2013. Yes, higher growth than when Ringgit was much stronger compared to today. Yes, higher growth despite all the ‘awesome’ news reports by many analysts. Yes, higher growth despite everyone saying the economy is not doing well and is on the brink of collapse because of a RM2 Billion debt owed to Malaysian banks by 1MDB. Do read online and look at some of the out of this world comments. Yes, I have written about this before earlier. Here: Oh No! Oil prices falling means Bursa stocks and Ringgit will fall too! Actually, while it is true that there are hiccups here and there, Malaysian economy is definitely not on the brink of collapsing and unless the whole world goes into crisis, there is little chance for Malaysia to jump into a financial crisis by itself.
The growth was largely driven by the domestic demand. Look at the cafes that is sprouting and the continuous opening of even more new retail stores and the frustration of not being able to find a car park in majority of all the popular departmental stores. Be worried when cafes are empty, retail stores have no one inside them and parking is very easy to find. There’s no need to rely on economists who will always be 6 months late. Open our eyes and note all these changes ourselves.
Bank Negara Malaysia governor Tan Sri Dr Zeti Akhtar Aziz said that Q4’s stronger growth of 5.8% is mostly due to stronger private spending. Since this is 75% of the Malaysian economy, this meant that as long as domestic demand is strong, Malaysia is strong enough to withstand some external shocks. Exports also provided another cushion while beginning 2014, Malaysia benefited from the lower oil prices as we have turned into net importer. After years of pushing for a stronger banking sector, it has remained strong and well capitalised. Health check? Passed.
written on 12 Feb 2015
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