Tag: GDP

Categories
Economics

[2725] Malaysia’s 4Q13 GDP figures

I was optimistic that the 4Q13 GDP figures would be strong. I was betting on export recovery while mindful that other components, mostly consumption growth, might slow down.

Indeed export growth recovered. But trade surplus was not as strong I thought it would. Still, the prospect of Malaysia experiencing a trade deficit is unlikely. The trade surplus was strong enough for me to say, hey, there would be no twin deficits for Malaysia, no siree.

So, I missed by full-year growth by about 18 basis points. I projected 4.9% growth (well, more like 4.86%) for 2013 but actual growth came at 4.7% (4.68% really).

While the 5.1% YoY for the quarter was still good, especially given the first two quarters had about 3% YoY only, this is one of those quarters which I find growth confusing.

I looked at the numbers and I saw consumption growth slowed, gross fixed capital formation growth slowed, government spending growth slowed and trade balance growth slowed too. I think the exports growth is the only real good news around, but clearly it was not strong enough to make overall growth accelerate.

Now, with every one of those major components had their quarterly YoY growth slowed, what could possible make the overall GDP numbers grew faster?

Inventories had a role in it.

You could see the contribution of all the GDP components to the 5.1% growth below. For the investment contribution, it is the fixed capital formation, which includes inventories:

20140213 4Q13 GDP contribution to growth

I am not so sure how I feel about that.

Categories
Economics

[2716] 3Q2013 GDP growth driven by consumption

The GDP in the third quarter grew respectably at 5.0% from the same quarter last year. I think it is the most satisfying growth in a long time. I have not checked for the base effect but consumption grew strongly and net exports did well. It was a plain old growth in the simplest terms, no mathematical quirks. I cannot say much, because I have written most of the stuff I wanted say for work.

But I can share you this chart, which shows what contributed to the GDP growth.

201311153QGDPGrowthContributionIt was a good quarter. Growth with solid foundation, domestically and externally. And it is pretty much close to my internal target (although for the wrong reason: I had expected exports to drive the GDP growth, but it was consumption instead.)

I am unsure why consumption was that strong. I will look into it later. Or wait for somebody to look into it. Hint hint.

Categories
Economics WDYT

[2715] Guess the 3Q2013 GDP growth!

I have not been this optimistic in a long time. I was right for being bearish for 1Q2013 and 2Q2013. I have also mentioned that 2Q growth would have been much worse if it was not for government spending. Even for the 4Q2012 when actual growth beat all estimates, I was not too impressed. Only the politicians were crowing about it.

All that was caused by weak trade.

I think I will be right to smile a little this time around.

Export growth recovered in the third quarter after months dragging the economy down. The trend had been so bad that some people worried Malaysia might experience current account deficit for the first time in ages. But the recovery in export growth, I think, has pushed the concern behind, especially with the decision by the US Federal Reserve to prolong its monetary stimulus. Having Janet Yallen as the chairwoman also helps, I suppose.

The bad news is that some revisions might be in order for last year’s GDP growth. I have noticed the authority revised last year’s trade numbers down by about 1o basis points in its recent release. We will see how they revised last year’s growth. The GDP in 3Q2012 grew 5.3% from the same quarter the year before. But that is the past. Nobody really quite cares for the past.

I am unsure how government spending changed during the quarter but I have imputed a very low growth in my projection. It is the post-election quarter anyway. There was less temptation to  spend money in a big way. Furthermore, there was this sudden panic about government finance because of what Fitch Ratings did last quarter.

Private consumption might have grown slower as well, by a little tiny weeny bit because of the gasoline and diesel subsidy cut, but I think it was not too bad as to negate good news from the improved trade figures during the quarter. In any case, private consumption growth should be around 7.0% still, and that is healthy by any mean.

Investment in terms of gross fixed capital formation might have improved as well because there was no more election. The greater clarity in terms of political outlook should increase confidence.

Because of this, I am expecting growth for the third quarter to be faster than 5.0% year-on-year. I would like to be crazy and say it would be closer to 6.0% year-on-year, but that would be me being too excited.

The official GDP estimate will be released by the Department of Statistics on Friday, November 15 2013. To journalists, note that it is the Department of Statistics, not the Bank Negara Malaysia.

So…

How fast do you think did the Malaysian economy grow in 3Q2013 from a year ago?

  • 6.0% or faster (7%, 1 Votes)
  • 5.5%-5.9% (7%, 1 Votes)
  • 5.0%-5.4% (43%, 6 Votes)
  • 4.5%-4.9% (14%, 2 Votes)
  • 4.0%-4.4% (14%, 2 Votes)
  • Slower than 4.0% (14%, 2 Votes)

Total Voters: 14

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Categories
Economics

[2709] Why Malaysia’s 2Q2013 GDP growth was mostly about government spending?

This chart can be a bit confusing but it essentially shows the contribution of the four GDP components to Malaysia’s overall real GDP growth.

20130829GDPgrowthContribution2Q2013

This is exactly the reason why I said it was all government spending previously (okay, all is not exactly accurate. It was a significant contributor, if you like). You can see how the government spending portion suddenly appeared strongly in the second quarter of 2013, while investment and consumption’s contribution shrank. Change in net exports was less bad but in terms of year-on-year contribution, it was less than the change in government spending by a huge margin.

Why did government spending go up?

It was the election as mentioned before (by the way, just to be clear, government spending here is more than federal government spending. Federal government spending was really decent, in contrast of the GDP numbers).

In some ways, the election was a de facto stimulus for the economy. The timing of the election was a fortunate accident. Overall growth would have been far worse without the increase in government expenditure. I calculated that if there were no government expenditure growth at all, the GDP would have expanded by about 2.0% YoY only.

Categories
Economics

[2707] A quick take on 2Q2013 GDP: it’s all government spending!

Malaysia’s GDP grew 4.3% YoY in the second quarter of 2013, slightly faster than 4.1% YoY in the previous quarter.

While it is faster growth, I find the numbers worrying because if it was not for government spending, overall growth would have been much worse. Investment growth was down, private consumption was down and exports contracted.

The government spending was just because of electioneering. Election saved Malaysia. Really (This can be confusing since federal government spending actually decreased from a year ago. Yea, I was surprised to find that out. The GDP government spending includes non-federal government spending. Please take note of that).

The good news is that, I think things will be brighter from now on. Investment should increase because there is more political clarity moving out of the second quarter.

I also think exports will improve, for reasons I have written previously.