{"id":15107,"date":"2015-08-14T12:57:16","date_gmt":"2015-08-14T04:57:16","guid":{"rendered":"http:\/\/maddruid.com\/?p=15107"},"modified":"2015-08-14T15:33:39","modified_gmt":"2015-08-14T07:33:39","slug":"2791-frontloanding-theory-confirmed-for-2q15-gdp","status":"publish","type":"post","link":"https:\/\/maddruid.com\/?p=15107","title":{"rendered":"[2791] Frontloanding theory confirmed for 2Q15 GDP"},"content":{"rendered":"

Apart from the slowdown in consumption, I was wrong<\/a>. The Malaysian GDP grew 4.9% from a year ago, considerably higher than what I thought it would be at 4.1%-4.2% YoY. Still, economic growth is decelerating quite drastically.<\/p>\n

\"Malaysian<\/p>\n

Trade surplus did not improve as\u00a0exports contracted\u00a0worse than imports, and not the other way round as I wrote previously. Service trade and price factors have something to do with it since trade values published monthly had suggested otherwise. I had naively taken the number without taking into account\u00a0export and import prices.<\/p>\n

Meanwhile, investment growth crashed, becoming much weaker than what I expected. The Pengerang project has not created much dent yet.<\/p>\n

But the\u00a0two\u00a0big things that caused me to miss the actual growth figure are inventories and government spending.\u00a0I should have raised\u00a0my inventory projection when the\u00a0industrial figures come out respectably okay but the pessimistic me refused to do so. And I had expected with all the rage for deficit targeting, government expenditure would have taken a big hit (yes, I know the GDP government spending does not correspond exactly to actual federal government spending and there are other states’ government spending to account for). It grew in annual terms instead.<\/p>\n

The thing that was really hard to get it wrong was consumption. The GST collected its toll. It was a stark slowdown, growing only 6.7% YoY after the 1Q15 8.8% YoY spike. Domestic demand growth decelerated\u00a0to 4.6% YoY from 7.9% YoY in the same period.<\/p>\n

A lot of people had expected a dip after the spike and they were right. The frontloading theory is\u00a0right.<\/p>\n

That has led\u00a0me thinking about how much did consumers stock up on their foodstuff and other typical consumer non-durable goods. None\u00a0of us has a warehouse to store a whole year worth of supplies.<\/p>\n

This is a hard and important question. Whatever the answer is, it is the key to knowing when will spending\u00a0normalization take place. When it\u00a0happens, I think it is reasonable to expect a massive spike in consumption, at least on quarter-on-quarter basis.<\/p>\n

If I had to guess, the normalization\u00a0would probably start\u00a0this\u00a0quarter. We\u00a0could see complete normalization\u00a0by the end of the year.<\/p>\n

Still, preempting the typical data for 3Q15, this quarter would likely be weak too and I feel we would only start getting better in 4Q15. The GST impact itself should be gone completely by 2Q16, if only because of mathematical artifact.<\/p>\n","protected":false},"excerpt":{"rendered":"

Apart from the slowdown in consumption, I was wrong. The Malaysian GDP grew 4.9% from a year ago, considerably higher than what I thought it would be at 4.1%-4.2% YoY. Still, economic growth is decelerating quite drastically. Trade surplus did not improve as\u00a0exports contracted\u00a0worse than imports, and not the other way round as I wrote […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[10],"tags":[731,304,1021],"class_list":["post-15107","post","type-post","status-publish","format-standard","hentry","category-economics","tag-consumption","tag-gdp","tag-gst"],"_links":{"self":[{"href":"https:\/\/maddruid.com\/index.php?rest_route=\/wp\/v2\/posts\/15107","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/maddruid.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/maddruid.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/maddruid.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/maddruid.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=15107"}],"version-history":[{"count":15,"href":"https:\/\/maddruid.com\/index.php?rest_route=\/wp\/v2\/posts\/15107\/revisions"}],"predecessor-version":[{"id":15123,"href":"https:\/\/maddruid.com\/index.php?rest_route=\/wp\/v2\/posts\/15107\/revisions\/15123"}],"wp:attachment":[{"href":"https:\/\/maddruid.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=15107"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/maddruid.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=15107"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/maddruid.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=15107"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}