According Morgan Stanley recent report, Malaysia trade surplus will condense, as slowing in demand and lower commodity price.
Mr. Deyi Tan Morgan Stanley economist predicted that South East Asian nation may grow 0.5% in 2009, while Malaysia goverment still expect our nation growth rate will at the rate of 3.5%. The economist also forecast that the trade surplus may narrow to 17.1% in 2009 from 20.6% 2008. Whose figure should the people rely on? We are the net export country, and the demand for export will decrease and the price of our commodity come down.
Malaysia growth model of trade is depend on commodity resource and fiscal pump-priming. With the currenct stituation, demand for export slow down, palm oil & crude oil price come down more than 50%, it is tough for us to maintain the trade balance.
On 11th Jan 2007 according to AFX news, Malaysia's second finance minister Nor Mohamed Yakcop remain confident that Malaysia economic growth will achieve around 6-6.5% in 2008 despite higher crude oil price at the point of time. He also mentioned that revenue from the state-run oil comapny Petronas will be better for with the higher oil price, but where is the money Petronas spend when the time Petronas enjoy higher oil price?
As Malaysia growth may be slow down, when the good time do the government keep the money? If yes, will the government spend it?
Reference :
1) http://www.btimes.com.my/Current_News/BTIMES/articles/20081219105257/Article/index_html
2) http://www.forbes.com/markets/feeds/afx/2007/11/01/afx4287510.html
