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
Photography

[2724] Anzac Bridge, Sydney

I was going through old photos today and I found this: the Anzac Bridge.

DSC_1722

I used to go to this spot quite often, because I lived nearby. I have lived in several places in this world and I think it is hard to beat Glebe in Sydney. I would wake up every day and every time walked out of the house, there, the Harbo(u)r Bridge would greet me. And the Anzac Bridge too. And that lazy black cat just down the road.

Categories
Economics

[2723] Is the weaker ringgit contributing to domestic inflation?

I have read in the media of allegation that the weaker ringgit is contributing to the rising inflation in Malaysia.[1]

The allegation makes sense. If Malaysia imports stuff, which the country does, and if the ringgit gets weaker, which it has (at least against several currencies and namely the US dollar), a weaker ringgit should contribute to domestic inflation. In the absence of data, I would support the idea of weaker currency is contributing to inflation.

Except, I am not entirely convinced by the data. In fact, the data is possibly telling me something to the opposite.

I have done some modeling in the past and it is hard to get a relationship between currency and inflation. At least, my modeling skills are not there yet, I would suppose. Even if I ignore all those econometric tests which the models failed, the effect of currency fluctuation under normal times, as I remember from those models, are so small that I would rather ignore them.

But here is something that does not rely on my econometrics. It is more straight forward in answering whether a weaker ringgit is contributing to domestic inflation. There are two possible proofs dismissing the role of the weaker ringgit.

The first is the producer price index (PPI) for imports. Crazily enough, it is still deflating and it has been deflating since January 2013 at the very least:

20140211PPIImportsDecember

One would expect, if the weaker ringgit was contributing to domestic inflation, the PPI for imports would increase and from there, the PPI inflation would somehow transmit to the consumers, affecting the CPI. I have not modeled this but the result for the a priori expectation that one needs to make the assumption that the weaker ringgit is contributing to domestic inflation is not going well here.

The second involves the import value and import volume growth. I have not thought of this thoroughly but if a weaker currency is contributing to domestic inflation, I would expect faster growth on import value than import volume growth. But in December, total import value (the one you see often in the press) rose 14.8% YoY. Volume grew 15.1% YoY. That means imports really are getting cheaper, corroborating the signal from the PPI imports.

So, is the depreciating ringgit contributing to the rising domestic inflation?

No. On the contrary, imports are a counteracting factor against inflation.

Again, this is just a preliminary thought that I just had. If my thinking holds, then I do not think the weaker ringgit is contributing to domestic inflation. At least not yet.

Right now, it seems, the rising CPI inflation in Malaysia is all caused subsidy cuts and domestic demand.

Mohd Hafiz Noor Shams. Some rights reserved Mohd Hafiz Noor Shams. Some rights reserved Mohd Hafiz Noor Shams. Some rights reserved
[1] — A weakening ringgit currency, which is down 1.5 per cent since the start of the year and at five-month lows against the dollar, could add to upward pressure on prices through more expensive imports, and reinforce the case for raising interest rates. [Malaysia inflation jumps as government feels heat over living costs. Reuters. The Malay Mail Online. January 22 2014]

Categories
Photography Travels

[2722] Innocence

Two kids somewhere south of Mandalay. They were following me around and they were more than happy to pose for a photo when I pointed my camera at them.

20131219Mandalay (252)

Notice that they are smiling but the monk child in maroon has his right foot bandaged. And look at the feet of the kid at the front, and his clothing too. Yet, they are smiling.

Categories
Photography Society Travels

[2721] A way of life as a product of tourism

I am at that stage when I am way too lazy to blog serious stuff. I blame it on Twitter.

So, more pictures. Let us hope with this one, I am less careless with the grammar. I have re-read some of the recent entries, and oh my god, embarrassing. Still…

I present to you, the Shwedagon pagoda.

20131216Rangoon (168)

Shwedagon is big and it is impressive but I think multiple writings exaggerate how it dominates Rangoon’s skyline. It might have in the old days, but you will not see it from downtown Rangoon. Nor at night, the lights reflected from Shwedagon’s golden stupa would fill the night sky (okay, maybe it did a little bit). This is just not the Empire State Building or the Petronas Twin Towers where you can spot it miles away. Those writers just have too much poetic license.

The approach to Shwedagon is great nevertheless. I walked from the downtown to Shwedagon, which was probably 4km-5km apart. At first I saw nothing. Just houses and barracks and trees. After awhile, a huge golden structure appeared at the end of that long road I was on.

I spent about 3 to 4 hours there. Not that it takes that much time to go explore the pagoda. This is not Angkor Wat or even Borobodur. It lacks details. You see them and you walk to the next thing. There is not Churning of the Milky Ocean kind of thing.

It was just that the human behavior was so interesting. It provided me with countless opportunities for photography. I wished I had a tripod with me since it got more interesting after sundown.

At some point while watching tourists snapping pictures of monks and praying Buddhists, a thought came to me: has Buddhism become a touristic attraction itself?

I mean, visitors just go round and round, coming in none stop, taking pictures of devotees and monks. While it is nice to have the religion being so friendly and open to tourists and outsiders, I do feel, somehow, the religion has been… commercialized, becoming a subject of camera shots.

A way of life becomes nothing but a product of tourism.

I remember in Mandalay, as monks walked across the Amarapura bridge, a tourist with his big camera probably worth thousands of dollars, with lens so big, you would need a stand to support it, pointing it to a monk, almost to the face, if I can have that poetic license to myself. The monk was miffed. Such disrespect, I would think he said. The monk made a gesture, telling him no.

A revolt from commercialization, maybe?