Malaysia in recession? Not in 2015.

Latest: Malaysia’s GDP growth for the whole of 2015 is 5 percent. We can read a report by our advanced neighbour about it here: Straits Times Malaysia GDP growth article We (Malaysia) slowed down in the final 2 quarters but continue to have big trade surpluses. On a weekly basis, there’s bound to be some ‘recession’ related search terms to Seriously, I have no idea why. Most of the time, the questions are asking if Malaysia is in a recession. There was one about ‘Is Malaysia out of recession.’ It prompted me to write this article: Recession 2014, ending soon?
Well, as at end of 2015, Malaysia is NOT in a recession. If anyone wishes to know some potential recession countries, better look at some neighbours instead, especially the less diversified ones. China is still slowing down even if I believe they are more than capable to prevent a hard landing. If they could not, I am not sure which country could. China has the world’s largest foreign currency reserve. Read here: Soros: Hard landing for China. China disagrees fully Oh yeah, oil prices dropping or staying at low levels may also affect some non-producing countries too. One real example, cutting costs meant that they may choose to move to cheaper countries instead. Malaysia is definitely a beneficiary country.
One old friend remarked recently that perhaps Malaysia manipulated the GDP numbers? I answered him very seriously. IF he does not yet know about Bank Negara Malaysia (BNM), he should read a bit more. I do not think he understood but it’s okay. That country that he supports and believe so much may be the next to be tested. Seriously, I think it’s time that more countries are tested instead of just Ringgit or Rupiah in the whole of 2015. Let’s see what happens yeah.
In summary for the 2015 GDP growth in Malaysia. BNM said, “”challenging operating environment in the immediate future”. Earlier: Getting ready for the next global recession? Domestic demand helped tremendously to offset the oil and commodity prices. For 2016, growth would again be driven by domestic demand with some support from net exports. Current account surplus doubled to RM11.4 billion (S$3.9 billion) in the October-December period from the previous quarter, boosted by higher portfolio and foreign direct investments. Ringgit was Asia’s worst performer in 2015. It is today one of the top performers in Asia and has strengthened to RM4.15 to US$1 today (19 Feb 2016).
I still think it’s best not to touch anything about currency, where investments are concerned. If we do not like Ringgit, proceed to buy some undervalued stocks instead of changing them into another currency believing that it may go higher. When the whole world is in trouble, I think majority would prefer to hold that world currency instead. Yes, that one. As for the rest, it’s just too volatile. Happy reading and investing.
written on 19 Feb 2016
Next suggested article: Increasing liquidity and maintaining rates


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