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Economic News

Jetstream

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Minister: Malaysia’s audit report thicker, so better than Singapore’s

KUALA LUMPUR, June 17 — Malaysia’s audit of federal agencies demonstrates exceeding accountability vis-a-vis Singapore, whose national audit report was “only 70 pages” long, a federal minister asserted today.

Datuk Paul Low, the minister in the Prime Minister’s Department in charge of integrity, said the Auditor-General’s Reports in Malaysia that consisted of thick volumes, were very detailed in comparison.

“Look at Singapore’s audit report, it’s only 70 pages, so in that sense, the practice we have today exceeds the norm of accountability for the public sector,” Low told a press briefing on the AG 2013 Report (second series) here today.

- See more at: http://www.themalaymailonline.com/m...o-better-than-singapores#sthash.NcVJWkR2.dpuf

http://www.themalaymailonline.com/m...udit-report-thicker-so-better-than-singapores

Paul Low was hammered by DAP's Tony Pua for that remark. Deserves it!
 

FHBH12

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Malaysia consumer prices, transport costs shoot up
Core inflation declines to 3.2% in May from 3.5% in February and March, and 3.4% in April
BY PAULINE NG IN KUALA LUMPUR
PUBLISHED JUNE 24, 2014

EVEN as the government contemplates further cuts to fuel subsidies, consumer prices for the first five months have more than doubled to an average of 3.4 per cent compared to 1.6 in the same period last year. Transport costs were 5.5 per cent higher in May against 2 per cent for the whole of last year.

Consumers are keeping a close watch on the costs of transport following the last 20 sen (S$0.07) per litre or 10.5 per cent hike in petrol and diesel prices in September 2013 as the government is expected to further cut fuel subsidies this year even though it has not acted so far.

Earlier projections had been for a fuel hike to be implemented by May or June, but now the expectations are for sometime in the third quarter.

The government needs to achieve another RM3.3 billion of savings in fuel subsidy this year if it is to meet its target of slashing the 2014 fuel bill to RM22.3 billion from RM28.9 billion last year.

Reducing the mammoth fuel bill will also help the government hit its objective of cutting the fiscal deficit to 3 per cent of gross domestic product this year.
By Maybank Investment's calculations, every 10 sen increase leads to a RM1.65 billion to RM2 billion fuel subsidy savings.

"So another 16.5-20 sen per litre hike at the start of the year would have done it," it observed in a subsidy rationalisation report earlier in June. But, because it is already mid-point, Maybank estimated fuel prices would have to be pushed up even more if the fuel savings target is to be met.

The government is reportedly considering how to institute the next fuel price hike and according to media reports, could include more controlled methods such as linking pump purchases to the use of the national identity card, income levels, or a quota system.

Although the objective is to ensure fuel subsidies are more targeted, the mooted methods are not fool-proof and could be difficult to implement. Maybank and Affin Investment see inflation accelerating to 3.5 per cent this year and inching to 4.0 next year from 2.1 per cent in 2013.

Meanwhile, core inflation improved to 3.2 per cent year on year in May from a high of 3.5 per cent in February and March, and 3.4 per cent in April.

Over the January-to-May period, alcoholic beverages and tobacco registered the highest spike in prices rising to 14.1 per cent from 6 per cent last year.

http://www.businesstimes.com.sg/pre...onsumer-prices-transport-costs-shoot-20140624
 

FHBH12

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Inflation should be quite high in 2H 2014 onward in JB. I see prices rising rapidly by about 5-15% these recent 2-3 months e.g. food and car wash, and should accelerate early next year.
 

cow138

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Inflation should be quite high in 2H 2014 onward in JB. I see prices rising rapidly by about 5-15% these recent 2-3 months e.g. food and car wash, and should accelerate early next year.

Already feeling the heat. Things are starting to get more and more expensive over the causeway. Inline with the improvement in services. But it's tough for those who are not earning Singapore currency.
 

gooddebt

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Good News ! Johor reclamation works stopped !


JOHOR BARU: The Department of Environment has issued a temporary stop-work order against all coastal land reclamation works for the development of the massive Forest City off Tanjung Kupang here pending a detailed study.

State Health and Environment Committee chairman Datuk Ayub Rahmat said any negotiation on lifting the suspension would be between the department and the project’s jointdevelopers, China’s Country Garden Holdings Co Ltd and state-owned Kumpulan Prasarana Rakyat Johor.

“The order came about a week ago and all land reclamation work in the area have been suspended pending further studies on the environmental effects of the project,” hetold the New Straits Times yesterday.

The reclamation works for the proposed 49-hectare Forest City tourist hub project began in early March and was expected to be completed by year’s end.

The project hit a snag after the Singaporean government raised concerns over the state’s coastal land reclamation projects, citing that it might cause trans-boundary issues.

It also sent several diplomatic notes and a formal request to the Federal Government for more information on the state’s coastal projects, specifically in the Straits of Johor.

In a statement, its Foreign Affairs Ministry had said there were international obligations for both countries to work closely on such matters.

Environmental activists have also voiced their worries on Johor’s shoreline reclamation works.

Ayub said the state government would monitor the progress of discussions between developers and the Department of Environment.

“We will wait for the department to complete their studies on the project, after which we will also ensure that all guidelines are met.”

On the concerns raised by the Singaporean government, Ayub said the state government valued the bilateral ties with its neighbour.

“We will look into the issue of other trans-boundary effects because of the land reclamation works.”

Ayub clarified that there was a preliminary Environmental Impact Assessment (EIA) report for the proposed Forest City project.

“Normally, shoreline reclamation projects below 50ha in size, such as the proposed Forest City project, does not need a EIA report under the Environmental Quality (prescribed activities) (Environmental Impact Assessment) Order 1987.

“However, as the project will have a 80-room hotel, increasing the area’s density, a preliminary EIA report was conducted and its findings submitted to the relevant authorities.”

Country Garden Holdings, which has its international office in Johor Baru, did not reply to queries.

Yesterday, the New Straits Times reported that the Johor government confirmed it had received a request by Putrajaya to furnish details on land reclamation projects in the state.

-NST 24 Jun 2014-
 

cow138

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Wow. Cool. Does it mean that a show down is coming between the sultan of Johor and Najib?
Looks like the central govt is stepping in the curb the Sultan activities.
 

FHBH12

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Najib is good friend of Chinese leaders. He needs Chinese investments n Chinese needs Malaysia to extend sea power in SEA. Unlikely for Malaysia to stop e Chinese developer.
 

malpaso

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yesterday in the STAR. Dr M comes out to tell rulers not to overstep boundaries and stay out of business. seems a backhand comments against recent johor ruler? wow.. dr M really outspoken. respect la!
 

nitecrawllerr

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yesterday in the STAR. Dr M comes out to tell rulers not to overstep boundaries and stay out of business. seems a backhand comments against recent johor ruler? wow.. dr M really outspoken. respect la!

Without him all the Chinese and the rest of the races have to kowtow to those hopless Agung!
 

FHBH12

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Solid US data lifts dollar vs euro, yen
POSTED: 30 Aug 2014 07:09

The dollar rose against the euro and the yen on Friday (Aug 29) as traders appeared to look past a disappointing US consumer spending report to focus on mostly brighter economic data.

NEW YORK: The dollar rose against the euro and the yen on Friday (Aug 29) as traders appeared to look past a disappointing US consumer spending report to focus on mostly brighter economic data.

A small, unexpected fall in US consumer spending in July - the first drop in six months - made little impression on the market. US data has been mostly upbeat this week, in contrast to persistent weakness in the Eurozone economy.

"The US dollar is seeing long-term sentiment start to build as economic data has improved considerably over the past few weeks," said Christopher Vecchio, currency analyst at DailyFX.

The euro sank to its lowest level in almost a year - $1.3134 - after weak Eurozone inflation data raised speculation about whether the European Central Bank would take fresh easing steps at its monetary policy meeting next Thursday.

Eurozone annual inflation slowed to 0.3 per cent in August, official data showed, raising concerns about deflation risk.

"The ECB is focused on stopping disinflation and trying to convince us all that deflation is not a threat. But this downshift in inflation clearly is not good news for the ECB or for its no-deflation-risk argument," said Robert Brusca, chief economist at FAO Economics.

Kathy Lien of BK Asset Management said that the ECB's meeting could even trump the impact of Friday's US jobs report in its impact on the euro/dollar trade.

"In no way shape or form is the ECB ready to roll out quantitative easing, but given recent economic reports, particularly from Germany, the case for additional stimulus is growing," she said.

- AFP/fl

http://www.channelnewsasia.com/news/business/solid-us-data-lifts/1337226.html
 

FHBH12

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News Analysis: Phl, Malaysia top emerging Asian economies in 2nd quarter growth
(philstar.com) | Updated August 29, 2014 - 11:30pm

MANILA, Philippines (Xinhua) - The Philippines and Malaysia recorded an identical 6.4 percent gross domestic product (GDP) growth for the second quarter of this year while the other Asian emerging economies registered slower growth.

Socioeconomic Planning Secretary Arsenio Balisacan said on Thursday that the Philippine economy regained its growth momentum for the period from April to June 2014 after a relatively slower growth of 5.7 percent in the first quarter.

Balisacan said that the higher growth rate of 6.4 percent showed that the Philippine economy "is back on the higher trajectory of growth registered in 2012 and 2013 and bodes well for economic growth in 2014".

The Philippine economy grew by 7.2 percent in 2013, the fastest in the region and second only to that of China.

In the second quarter, China still recorded the fastest in the whole of Asia with 7.5 percent GDP growth.

According to Balisacan, for the Philippine economy to hit the low end of the government's target this year, growth should average at least 6.9 percent in the second half. The country's first-half GDP growth was 6.0 percent

Domestic demand continued to be underpinned by remittances from Filipinos working and living abroad, which grew 5.8 percent to $11.4 billion in the first half of the year from a year ago.

Balisacan said that growth in the second quarter was led by the industrial sector which grew 7.8 percent from a year earlier, up from 5.3 percent in the first quarter. Manufacturing was the highest contributor to the industrial sector, climbing 10.8 percent.

Just like in the Philippines, Malaysia's growth of 6.4 percent was also underpinned by strong growth in the services and manufacturing sectors, exceeding forecasts of 5.8 percent, as well as exports.

For the first half of 2014, Malaysia's GDP expanded by 6.3 percent from 4.4 percent a year ago.

Indonesia, the region's largest economy, grew 5.12 percent in the second quarter of 2014, an indication that the country's GDP growth continued to slow down which started in 2011.

The 5.12 percent GDP growth of Indonesia for the second quarter was the slowest growth pace that has been recorded by the country since the fourth quarter of 2009.

For the second quarter, Singapore grew by 2.4 percent on a year- on-year basis, slower than the 4.8 percent that it generated in the first quarter, according to Singapore's Ministry of Trade and Industry (MTI).

The MTI also announced that it has narrowed the state's GDP growth forecast for 2014 to between 2.5 percent and 3.5 percent.

Thailand, which has been plagued by political instability, grew by only 0.90 percent in the second quarter, slower than the 1.8 percent growth in the preceding quarter.

The Thai military seized power on May 22, hurting investments, tourism and domestic consumption.

The country avoided recession in the second quarter of 2014 since the slowdown in political protests helped exports and restored consumer confidence.

However, in June 2014, manufacturing production in Thailand contracted for the 15th straight month and the number of tourists fell to its lowest in more than two years.

Thailand's National Economic and Social Development Board ( NESDB), which compiles GDP data, has trimmed its full-year growth forecast for the country to 1.5 percent to 2.0 percent from a 1.5 percent to 2.5 percent.

In the Philippines, Balisacan said that government's under spending in the second quarter was a cause for concern but adding that the government "is aware of this and is taking the right steps to address bottlenecks." "And we are doing this with a sense of urgency. Proof of this will be demonstrated in the second half when the government spending contributes to the economy's growth while committing to improving our overall competitiveness and the delivery of the needed public goods and services," Balisacan said. The government expenditure in the second quarter was flat from a year earlier, compared with 12 percent growth in the same period of 2013, official data showed.

Balisacan said that their projections for the rest of the year are not without risks given the impact later this year of an El Nino dry weather phenomenon on power and farm output.

But among the members of the Association of Southeast Asian Nations (ASEAN), the Philippines remains a popular investment destination due to its relatively strong economic fundamentals, a stable political environment and improved credit ratings.

In May, Standard & Poor's raised the country's long-term credit to two notches above investment grade.

http://www.philstar.com/business/20...ysia-top-emerging-asian-economies-2nd-quarter
 

FHBH12

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Sluggish outlook for global trade
BY CECILIA KOK
Published: Saturday August 30, 2014 MYT 12:00:00 AM
Updated: Saturday August 30, 2014 MYT 8:09:42 AM

DESPITE leading indicators suggesting that the global economic recovery will strengthen in the second half of the year, it may not be all good news for trade-dependent economies such as Malaysia.

Several economists have cast doubts that global trade would pick up strongly amid an improving, but uneven, recovery, in the final six months of 2014. Overall demand from major importing nations such as the United States and those in Europe, they note, is expected to grow sluggishly.

“All in all, things are not looking so well for the global trade cycle,” the Royal Bank of Scotland’s (RBS) Hong Kong-based economists led by Louis Kuijs and Tiffany Qiu say.

“While we still expect global trade to continue to grow at a reasonable pace in the coming six months, we expect no significant pick-up in growth of global demand anymore for the rest of the year,” they say, adding that economic growth in many countries is likely to disappoint in the coming months because of the unfavourable global trade developments.

Last month, the International Monetary Fund (IMF) downgraded its global trade growth projection for 2014 to 4% from 4.3%. In 2013, global trade volume grew 3.1%.

The IMF’s latest projection is featured in its World Economic Outlook July report, in which it projects the global gross domestic product this year to grow 3.4%, up slightly from the 3.2% in 2013.

RBS’ economists note that since the recovery of the 2008/2009 global financial crisis, global trade growth has been markedly sluggish. They say that while this is in part due to the modest global economic growth, the deliberate strategies of several developed nations to get more growth out of exports and rely less on domestic spending, as well as the austerity drive in many developed markets have put pressure on global trade growth.

Slowing import demand

According to the RBS, while the prospects for US import demand are reasonably good in the months ahead as the world’s largest economy continues to pick up, import demand from the euro-area and Japan will likely remain weak.

In addition, with China’s economy slowing, import demand by the world’s second-largest economy is also expected to weaken, RBS say.

“China’s import growth slowed in a more pronounced manner than the country’s economic growth because import-sensitive demand components, such as real estate and corporate investment, have been particularly sluggish in recent months,” Kuijs and Qiu explain.

“The resulting weaker demand for commodities has reduced growth of incomes and imports in many commodity-exporting economies, notably many emerging markets,” they point out.

China, Japan, the United States and European Union are major export destinations of Malaysia.

Latest data from the Statistics Department show that Malaysia’s exports growth had slowed sharply to 7.9% in June, compared with 16.2% in May, led by contraction in demand from China and Japan.

With Malaysia’s imports growth at 9.2% in June outpacing exports growth, the overall trade surplus narrowed to RM3.97bil from RM5.72bil in May.

The Statistics Department is expected to release Malaysia’s trade data for July in the week ahead.

While the country saw robust exports growth in the first half of 2014, economists believe the country’s overall exports growth in the second half of the year will likely moderate on account of slowing demand from major economies and lower commodity prices.

According to RHB Research, the high base effect, which will set in by the second half of the year, will also mean less robust Malaysia export numbers.

“In this regard, we envisage the economy to expand at a more moderate pace of 5.3% year-on-year (y-o-y) in the second half of 2014 versus 6.3% in the first half,” the brokerage house notes.

During the first half of 2014, Malaysia’s exports registered strong double-digit growth of 12.6%, compared with a contraction of 4% in the first six months of 2013, led by a rebound in the exports of electrical and electronic products and healthy demand for commodities.

New concern

Meanwhile, the declining commodity prices, especially that of crude palm oil, does not bode well for Malaysia, a major exporter of commodities.

Malaysia’s commodity export is driven mainly by four commodities, namely palm oil, liquefied natural gas, crude oil and natural rubber.

In the first six months of 2014, the four commodities and their related products accounted for about 31.2%, or RM118.71bil, of the country’s total exports of RM380.14bil.

In the first half of last year, their exports contributed RM104.57bil, or 31%, of Malaysia’s total exports of RM337.82bil.

Going forward, the weak commodity prices will result in lower receipts, hence dampening the value of the country’s exports in the segment.

In addition, the strong ringgit is expected to weigh on Malaysia’s export competitiveness. The ringgit has been gaining strength against the US dollar in recent months due to foreign capital inflow.

According to M&A Securities, the ringgit may continue to gain strength in the coming months.

“The fact that Malaysia’s policy rate has been tightened way ahead of the United States supports our conviction that ringgit is likely to maintain its prowess and stay steady against the greenback,” M&A Securities says, adding that it projects the ringgit to average at RM3.20-RM3.25 per US dollar in 2014, compared with the 2013 average of RM3.17 per US dollar.

According to Alliance Research, with the strong growth in Malaysia’s exports demand expected to taper off in the second half, a new concern in the form of trade deficit has emerged.

“If trade surpluses decline further, this will snap the country’s record of current account surplus for the past 17 years,” the broker said.

The last recorded trade deficit by Malaysia was in October 1997.

“Although it has not materialised now, we have to remain cautious,” Alliance Research adds.

http://www.thestar.com.my/Business/...rowth-likely-to-slow-down-in-the-second-half/
 

FHBH12

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Malaysia to raise fuel prices by 20 sen
The Star/Asia News NetworkWednesday, Oct 01, 2014

PETALING JAYA - Malaysia will raise prices of petrol and diesel by 20 sen (8 Singapore cents) from midnight on Wednesday.

The decision to reduce current fuel subsidy was taken in keeping with the subsidy rationalisation plan to ensure the nation's finances remain strong, the Domestic Trade, Cooperatives and Consumerism Ministry said in a statement.

As per the new prices, RON95 petrol will cost RM2.30 per litre while diesel will cost RM2.20 per litre.

"Despite the increase, the government will still need to spend more than RM21 billion on fuel and LPG subsidies for this year," the statement added.

It said the government also aims to curb smuggling and ensuring that the current subsidy is not misused.

- See more at: http://news.asiaone.com/news/ride/malaysia-raise-fuel-prices-20-sen#sthash.AYcKYd6O.dpuf
 

FHBH12

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Budget 2015 to address inflation
K Harinderan | October 7, 2014

Najib is expected to emphasise measures to make goods and services affordable.

PETALING JAYA: Analysts believe Budget 2015 will focus partly on reducing the impact of inflation on the poor and those earning medium-level incomes.

They say it is likely to delve into allocations and incentives to ensure the welfare of those two sections of society, who together make up the bulk of the Malaysian population.

The line separating the poor and middle-income sectors of society is said to have blurred because many in the latter category have fallen below the poverty line as the cost of living rises. This is especially true of those living in urban areas.

The so-called “people centric” budget, to be tabled this Friday by Prime Minister Najib Razak, is expected to emphasise measures to ensure the affordability of goods and services.

Some say the recent fuel price hike has caused or will cause price increases in 90% of goods and services. Najib is expected to take this into account.

Bantuan Rakyat 1Malaysia (BR1M) is expected to be increased to RM900 for those earning a household income of RM3,000 a month or less. For singles earning RM2,000 a month or less, it is expected to rise from RM350 to RM500.

Najib is also expected to present specific incentives or improved plans to enable youths to purchase homes.

Speculation in real estate has caused the prices of homes to be artificially inflated. Analysts say this is due largely to the absence of a strict control mechanism put in place by the government. They say there has to be an affordable home ownership programme to mitigate against this challenge and it must be based on realistic buying power.

The budget is also expected to address the need to give more citizens access to higher education as well as provide incentives to improve the knowledge economy.

Analysts expect a bigger allocation for the PTPTN study loans to enable students to pursue post-graduate degrees, which in turn would spur on the K-economy. More funds will probably also be set aside for research and development and incentives given for researchers to commercialise their products.

Another focus of the budget will be the small and medium-size enterprises (SME) sector. According to a financial analyst, the challenge to enlarge the SME sector has to be met first and foremost with incentives that will produce more skilled workers. He said there had to be more funds for training and incentives for workers to succeed in their chosen skills.

Other likely announcements in the budget are a salary rise for civil servants, an increase in the allocation for book vouchers for students, more incentives to promote training in agriculture, and bigger allocations to help disabled citizens as well as single mothers.

http://www.freemalaysiatoday.com/category/nation/2014/10/07/budget-2015-to-address-inflation/
 

FHBH12

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What to watch for - Malaysia's 2015 budget
Thu Oct 9, 2014 8:36am BST

9 (Reuters) - Malaysia's Prime Minister Najib Razak will present the government's annual budget for 2015 on Oct 10. Below are some items expected by analysts, compiled from research notes and media reports.

For a preview of the budget, please see.

TARGETED FUEL SUBSIDY SCHEME

Najib could announce reform of the fuel subsidy regime in order to move away from a blanket subsidy for all consumers in favour of a system that benefits lower to middle-income earners. Abdul Wahid Omar, a prime ministerial aide, has said private firms have submitted proposals for fuel prices to be charged based on income levels, vehicle types and engine capacities.

FURTHER SUBSIDY CUTS

The government may look to reduce subsidies on essential food items, such as flour and cooking oil, as well as household gas, said RHB Research.

NEW EXEMPTIONS FROM GOODS AND SERVICES TAX (GST)

The GST will be implemented in April 2015 at a rate of six percent. Fresh food, public transport, education fees and healthcare are currently exempted. Maybank Investment Bank Research expects the government to announce an amended list that may include more exemptions. Maybank reckons GST revenues could decline to 2.4 billion ringgit from 4 billion ringgit for the April to December period, and 7 billion ringgit for 2016 from the initial projection of 9 billion ringgit.

OPERATIONAL EXPENSES

The Fiscal Policy Committee may introduce measures to contain the size of the civil service and limit the portion of total operating expenses that salaries take, said RHB Research.

CASH AIDS, HIGHER MINIMUM WAGE

Bantuan Rakyat 1Malaysia (BR1M), a programme to hand out cash assistance to households earning less than 4,000 ringgit a month and individuals earning less than 2,000 ringgit, could be increased by 300 ringgit, said AmResearch. The expansion in BR1M will likely cost the government 7.5 billion ringgit in 2015, up from 4.6 billion ringgit last year, the bank added.

The minimum wage may be raised, accompanied by measures to enhance productivity, said Hong Leong.

PROPERTY MARKET

Exemptions on stamp duty for first-time house buyers may be extended, said Alliance DBS Research. The current incentive saves buyers 50 percent of stamp duty costs on residential properties below 400,000 ringgit, and is due to expire at the end of this year.

Real property gains tax (RPGT) may be raised further this year, to curb speculation, said Kenanga Research. The RPGT rate was increased in 2013 to 30 percent for properties held for less than three years. For disposals within the holding period up to 4 and 5 years the rates rose to 20 percent and 15 percent.

Strong measures to curb property speculation still risk slowing down consumption and domestic demand, said Affin Investment Bank.

A GST rebate may be introduced on building materials used in the construction of medium to low cost properties, MIDF Research said in an interview with Business Times.

The Real Estate and Housing Developers' Association wants the government to exempt the GST from residential properties below RM500,000, said a report in state newswire Bernama.

LOWER CORPORATE, PERSONAL TAXES

Corporate taxes may be lowered by more than the 1 percent cut announced for 2016, as Malaysia's tax rates are still higher than regional peers, said Kenanga Research. Other banks predict that the government is more likely to bring forward the cut in corporate taxes rather than increase the amount of the cut.

New tax reliefs for households may be announced, to further alleviate the cost of living, said Alliance DBS.

INFRASTRUCTURE SPENDING

More funds may be allocated to improve the country's railway infrastructure and network. This includes ongoing work in Kuala Lumpur, and the planned commuter train linking Singapore to Johor Bahru, said Maybank.

The government may allocate more development funds for states in eastern and northern in peninsula Malaysia, said Kenanga Research. Sarawak state, on Borneo island, could also receive more funds, mainly for its rail network and the Sarawak Corridor of Renewable Energy, said Maybank.

HIGHER OIL ROYALTIES

The states of Sabah, Sarawak and Terengganu may be awarded higher royalties on oil production than the current 5 percent rate, said Maybank. In May, Sarawak requested that the rate be raised to 20 percent. Other states would expect the same treatment, said Maybank.

ISLAMIC FINANCE

Tax incentives could be offered to promote Islamic bonds in foreign currencies, Maybank said. Non-ringgit sukuk account for less than ten percent of all issuances.

FDI

More incentives may be offered to attract higher value-added export oriented foreign direct investment (FDI), said RHB Research.

(Reporting By Trinna Leong and Al-Zaquan Amer Hamzah; Editing by Simon Cameron-Moore)

http://uk.reuters.com/article/2014/10/09/malaysia-economy-budget-idUKL6N0RY1VT20141009
 
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