ID :
122692
Tue, 05/18/2010 - 08:15
Auther :
Shortlink :
https://oananews.org//node/122692
The shortlink copeid
CYCLICAL MOMENTUM IS STRONG IN M'SIA - MORGAN STANLEY
KUALA LUMPUR, May 18 (Bernama) -- Global financial services firm Morgan Stanley says cyclical momentum is strong in Malaysia, driven by manufacturing exports and commodity resources.
It said exports stood only 2.3 per cent below their pre-crisis peak level.
"Indeed, the rebound, which was initially led by inventory restocking, appear to
be persisting for longer," it said in a research report on Asean economics.
It said improving terms of trade from elevated commodity prices had also
augmented the commodity-related trade surplus. "The spillover to domestic demand
is palpable," it added.
Auto sales had increased, job retrenchments had slowed and corporates had
taken up more working capital loans, and despite the strong cyclical rebound,
inflation fears were likely to remain subdued.
Morgan Stanley said that in the near term, downside risks stemmed from
possible spillover via trade linkages from the European Union sovereign debt
concerns.
"However, if global policy stance is kept accomodative for longer as a
result, risks would be skewed to the upside on growth an inflation," it said.
It also noted that Prime Minister Najib Tun Razak had announced
the New Economic Model (NEM) to try to arrest what it saw as a structural
downtrend in the gross domestic product.
"The issues laid out in NEM were not new but what surprised us was this was
the most candid and comprehensive outline by policymakers of the impediments
faced by the economy.
"Tricky issues less overtly discussed previously were touched upon in fairly
strong language," it said.
It said NEM had rightly identified the issues but implementation remained
the crucial step going forward.
"We think, raising the quality of education would be one area which would
address the crux of Malaysia's problem without being politically offensive. We
would be watching out for a critical mass of reforms on this front as a signpost
for Malaysia's structural inflexion point," Morgan Stanley said.
-- BERNAMA
It said exports stood only 2.3 per cent below their pre-crisis peak level.
"Indeed, the rebound, which was initially led by inventory restocking, appear to
be persisting for longer," it said in a research report on Asean economics.
It said improving terms of trade from elevated commodity prices had also
augmented the commodity-related trade surplus. "The spillover to domestic demand
is palpable," it added.
Auto sales had increased, job retrenchments had slowed and corporates had
taken up more working capital loans, and despite the strong cyclical rebound,
inflation fears were likely to remain subdued.
Morgan Stanley said that in the near term, downside risks stemmed from
possible spillover via trade linkages from the European Union sovereign debt
concerns.
"However, if global policy stance is kept accomodative for longer as a
result, risks would be skewed to the upside on growth an inflation," it said.
It also noted that Prime Minister Najib Tun Razak had announced
the New Economic Model (NEM) to try to arrest what it saw as a structural
downtrend in the gross domestic product.
"The issues laid out in NEM were not new but what surprised us was this was
the most candid and comprehensive outline by policymakers of the impediments
faced by the economy.
"Tricky issues less overtly discussed previously were touched upon in fairly
strong language," it said.
It said NEM had rightly identified the issues but implementation remained
the crucial step going forward.
"We think, raising the quality of education would be one area which would
address the crux of Malaysia's problem without being politically offensive. We
would be watching out for a critical mass of reforms on this front as a signpost
for Malaysia's structural inflexion point," Morgan Stanley said.
-- BERNAMA
