What A World Of Difference!
This morning, a friend alerted me to this article HERE about how “THE Singapore economy is estimated to have expanded by 14.7 per cent in 2010, in line with the Ministry of Trade and Industry’s (MTI) growth forecast of about 15 per cent for the year.
Singapore’s expansion for 2010 would make it the fastest-growing economy in the world after Qatar’s, according to International Monetary Fund estimates.”
In sharp contrast, THIS SITE gives a startling report (and I have highlighted some important points):
The Malaysian economy has grown rapidly in 2010, and is very likely to attain an annual seven percent gross domestic product (GDP) growth. But the year ahead still poses challenges to the third largest economy in Southeast Asia.
While the Malaysian government and some economists believe the Malaysian economy can grow between five percent to six percent, many are in doubt, worrying that the country’s economy may be disturbed by internal and external uncertainties, including the inflow of short-term hot money.
The export-led country is facing unfavorable external conditions. This is evidenced by the significant decrease in the country’s exports forecasts. It is projected that Malaysia’s exports growth to slow down to nine percent next year from about 17.2 percent in 2010.
To cushion the negative impacts of sluggish demand from abroad, the Malaysian government has to strengthen domestic demand.
By executing the various economic transformation plans announced by Malaysian Prime Minister Najib Razak, the country aims to become a high-income developed nation with a per capita income of 15,000 U.S. dollars, more than twice the current level of 7,000 U.S. dollars.
To achieve the target, the country’s GDP must grow at least six percent a year and attract over 400 billion U.S. dollars of private domestic investment in the next decade.
However, the sentiment of the country’s private sector is very much dampened by the rising inflation and the interest rates in the country. Malaysia’s central bank has raised the overnight policy rate thrice by a total of 75 basis points this year, increasing the borrowing and business costs.
As private investment has been regarded as one of Malaysia’s economic growth engine, any slowdown would affect the domestic economy.
Meanwhile, high household debt may also cause problems whereby rising bad debts, credit card debts and personal loans would reduce total private consumption.
Malaysian household debt, as a percent of GDP, has increased to about 77 percent from 3 percent in 1997, the highest in Asia after South Korea.
Investors, both local and foreign, will also factor in political development in the country when making investment decisions.
Not a very favorable review right? Hang on…let’s have a look at the following excerpt taken from The Star and written by Tan Sri Dr Wan Abdul Aziz Wan Abdullah, secretary-general of the Finance Ministry:
