After recession – Economic balance in Malaysia

This particular year started rather optimistic with thorough hope of the global economy to start recovering after the shaky performance that took place in the last year (Also see 5 accounting tips for small businesses). In any case, it’s a fact that the majority of economies are still gathering the broken pieces and they are trying to put them together in order to come up with a proper recovery trajectory for the upcoming months.

When it comes to Malaysia, it’s safe to say that the external demand during the previous year was rather weak and unfortunately it’s still expected to continue by this negative tendency. This is mainly due to the fact that the slower growth of China is definitely not forthcoming to the external front of Malaysia to add to the currently shaky performance of the entire euro zone as well as the Federal Reserve’s policy of accelerated slow down. The net exports of the country dropped with about 3.7% throughout 2015 and the domestic demand was without a doubt the catalyst for the overall growth of the year. However, the latter was also pretty moderate as it took a leap with about 5.1% in comparison to the 5.9% from the year before that. In any case, the real GDP growth of the country of Malaysia in 2015 was with 5.0% while in 2014 it was 6.4%.

Inflation Rates On The Low

However, this is going to keep the inflation rate below the average of 3.0% which is the long-run one in spite of the high inflationary expectation caused by the sturdy depreciation. As of this year, the domestic demand of Malaysia is definitely expected to be the catalyst of this year’s Malaysian economy amid the rather sluggish and slow world economy. The commodity prices remain weak which is going to be slowing down the growth of the economy. In any case, according to the World Economic Outlook the trade volumes of April grew by 2.8% in comparison to last year and they are expected to grow further throughout the rest of the year and even more so in 2017.

A Positive Tendency

At the same time, the WEO is also positive that the net export of the country is also going to be improving by a stable and positive 1.2% as compared to the negative -3.7% of the year before. The statistics are rather controversial but it seems as if Malaysia is managing to do quite well as opposed to the overly shake global economy.

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