Lim Chee Sing, an Economic Expert, Comments about Malaysia

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TODAY, well, yesterday, since it has past midnight, I watched the 11pm Nightline on TV3 presented in its special format, Ringgit Sense. To my delight, it was Mr Lim Chee Sing's turn to be interviewed. I have very high regards of this dude. He had once given me and my team a lecture on Malaysian economic update back in 2013. He is the Group Head Economist for the RHB Group. A prominent guy in that field.

Lim is vey fair and unbiased. He had these comments to offer us, laymen, to understand Malaysian economics rather than listening to the propaganda infected news and bloggers out there especially the internet and social media:

Malaysian economy continues to grow despite all the other negative indicators. This is evident from its first half year Gross Domestic Product growth of 5.3% for 2015. It is expected that the whole 2015 will close at 5% and even if is to be lower, it would be close to 5%, making it one of the best performers in the region. 

The strong performance is because Malaysia has a very good economic fundamental substance. For example, its fiscal policies included a more efficient broadbase consumption tax, Goods and Services Tax, that not only helped improve Government revenues, but also reduces reliance on other sources of revenues. This is a courageous move given its unpopular reaction from the public politically.

Then there is the issue of CDS marking Malaysia as junk. Clearly this lacks fairness because it was concluded on the back of a very risk adverse mindset of short term investors. As mentioned earlier, it is not a fair conclusion. This conclusion was merely arrived at by virtue of them grouping Malaysia in the same group as Brazil. Brazil was earlier rated as junk by S&P. However, Malaysia got a good rating of A - by S&P. How can Malaysia be grouped together with Brazil? 

It must be comprehended that the Malaysian economic problem's main culprit is the oil price. Malaysian has been over dependent on oil revenues. As a result of Global economic's influence over oil price, i.e. dampening, Malaysian has seen a fall in its oil export revenues. Lesser Ringgit demand for oil exports has caused the Ringgit to fall. That is the main cause of the Ringgit depreciation.

Many parties blamed the domestic political turmoil on governance matters had caused the fall in Ringgit. Of course, political landscape has its impact on the confidence investors have for our economy, and hence affecting the Ringgit. However, this is not the main contributor to the fall in Ringgit. I must remind that oil price was and is the biggest contributor to Ringgit depreciation.

With the Government's objective policy settings, particularly for the 2017 National Budget as well as the roll out of Rancangan Malaysia ke-11 (11th Malaysia Plan), We have good chance of emerging out of this economic downturn.

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* kopihangtuah

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