Guan Eng: Viralled economic report on Malaysia misleading

Finance Minister Lim Guan Eng says people should not lose focus over short-term fluctuations as the overall economic situation is more accurately depicted by longer-term trends. ― Picture by Sayuti Zainudin
Finance Minister Lim Guan Eng says people should not lose focus over short-term fluctuations as the overall economic situation is more accurately depicted by longer-term trends. ― Picture by Sayuti Zainudin

KUALA LUMPUR, Jan 5 ― Finance Minister Lim Guan Eng has dismissed a report citing the Nikkei, which is being viralled online, as an attempt by irresponsible elements to give a misleading perception of the state of the Malaysian economy.

He said the report was an old article based on statistics in August, which said that the country’s trade surplus was only RM1.6 billion and the lowest in 45 months.

“However, giving a monthly snapshot is not accurate because it does not correspond with Malaysia’s performance over the whole year,” he said in a statement today.

“Just two months after the August figures, later in October, Malaysia’s trade surplus rose to a record of RM16.3 Billion, the highest level ever in Malaysian history.

“Exports rose 17.7 per cent to RM96.4 Billion in the same month, a record high for the country. This shows that monthly data is extremely volatile and does not reflect the entire picture of the domestic economy.”

He said people should not lose focus over short-term fluctuations as the overall economic situation is more accurately depicted by longer-term trends.

Lim added that the Nikkei Malaysia Manufacturing Purchasing Managers’ Index (PMI) for December 2018 falling to a low of 46.8 points, should not be considered as a reflection of the entire economy for the whole year.

“Indeed, longer-term figures such as approved manufacturing FDI for the first 9 months of 2018 rose 250 per cent to RM49 billion. These investments will be realised in the future to create high-quality jobs for Malaysians. Additionally, Malaysia’s stock market was the second best performer in Asia-Pacific in 2018,” he said.

Lim also said inflation  averaged only one per cent year-on-year for the first 11 months of 2018 helped by the removal of the Goods and Services Tax and replaced by the Sales and Services Tax, and that inflation will remain favourable to consumers in the near future due to low energy prices.

He pointed out that the ringgit has improved to RM4.14 to US$1 today, from RM4.20 in November 2018 when it was at its weakest, adding that Malaysia still has a sizable current account surplus of RM22.7 Billion or 2.5 per cent of the gross domestic product as of end September 2018, with the positive current account balance expected to persist this year.

This, Lim said, is partly the reason why Malaysia’s international credit ratings have been maintained, and the reason Bloomberg placed Malaysia as the best among 20 emerging markets for investment.

“I would like to stress that the domestic banking system continues to have sufficient liquidity while the monetary system is healthy and stable. The government will continue to help grow the economy sustainably to benefit the rakyat,” he said.