Friday, August 26, 2011

AmResearch rules out a double-dip in the Malaysian economy

AmResearch has ruled out a double-dip in the Malaysian economy, as robust levels of domestic demand along with ample liquidity and government's economic transformation programme (ETP) will provide support at the tail-end of the year.

Its senior economist Manokaran Mottain in a note Friday, aug 26 said concerns about a potential double dip recession in the global economy had resurfaced, given the realisation that the heavily-indebted developed western countries can no longer spend their way out of any potential downturn.

Emerging economies were threatened by falling exports due to stagnant growth or recession in the OECD economies, as well as persistently high inflationary pressures, he said.

'The US and Eurozone economies have stagnated. Although the risk of a double dip in individual economies, especially for the US and EU, has increased tremendously in recent weeks, we believe that the global economic recovery would be supported by sustained growth in the emerging economies such as China and India,' he said.

Manokaran said these economies should have no issue in further extending fiscal and monetary support to their respective economies, if the need arises.

'While slower rates of growth were seen in these countries recently due to intensive monetary tightening earlier in the year, improving consumer sentiments on the back of falling commodity prices will likely kick start consumer spending across the region, fostering robust levels of growth across all sectors,' he said.


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