malaysian export growth weakens could damage overseas property
News Posted On: 03 August 2010
Fears over the global economic recovery spawned from the Euro sovereign debt crisis and the slowing US recovery, have led to slowing growth in Malaysian exports.
According to the latest data from the Malaysian trade ministry, the year on year growth in overseas shipments was17.2%. While still a strong growth, that represents a major slowdown on the 21.8% year on year growth recorded in May. In fact it is the slowest growth in 7 months.
The median estimate in a Bloomberg News survey of 13 economists was for a 17.3 percent increase.
The US and China are two of the biggest importers of Malaysian goods, and both have experienced growth slowing in recent times. Adding to that, many European governments are implementing harsh austerity measures to cut public debt, which threatens demand for Asian goods including Unisem (M) Bhd. computer chips.
While analysts expect slower growth in the second half of the year, it is expected that the government will stop raising interest rates.
“With this growing issue of concern about the external condition I think Bank Negara Malaysia is likely to pause on its interest rate hikes,” Suhaimi Ilias, an economist at Maybank Investment Bank Bhd., said before the report.
Keeping interest rates down is good news for property buyers, but slowing growth is not. As with most Asian markets, strong economic growth is one thing buyers tend to look for. This is especially true of Malaysian property, because of the high proportion of buyers who are emigrating for better job prospects and a better way of life.
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