ID :
140928
Mon, 09/06/2010 - 17:06
Auther :

MALAYSIA'S EXPORTS GROWTH MOMENTUM TO CONTINUE TO SLOW, SAYS OSK-DMG




KUALA LUMPUR, Sept 6 (Bernama) -- Despite Malaysia's recovery in domestic
consumer spending growth, the exports growth momentum has been slowing down
recently, notably with the waning base effects starting to kick-in, says OSK-DMG
Group Economics.

"With the uncertainty in the pace of global economic recovery going forward,
we think the exports growth momentum will continue to slow.

"This is consistent with our manufacturing output growth forecast of 5.7 per
cent in the second half of this year, down from the 16.4 per cent recorded in
the first," OSK-DMG said in a economic research note Monday.

On average, the level of exports in the first half of the year at around
RM151 billion, was less than the 2008 average of about RM156 billion
(US$1=RM3.1).

"This implies that Bank Negara still believes Malaysia's exports remain an
important engine of growth, even though private consumption growth has
shown a robust recovery," OSK-DMG explained.

On the ringgit front, OSK-DMG said it is likely to see the current
strengthening trend of the ringgit tapering off, going into the next two
quarters following the end of policy normalisation.

"Our estimated ringgit nominal effective exchange rate (NEER) suggests a
close co-movement with the overnight policy rate (OPR) and monetary policy
stance.

"We estimate that with our revised OPR forecast of 2.75 per cent for
year-end, the NEER gain may slow down, going forward. It has a 75 per cent
correlation with the US dollar," it said.

However, in light of the recent forex liberalisation move by the central
bank, OSK-DMG said it has revised its third and fourth quarter forecast for the
ringgit lower to 3.15 to 3.16 from 3.20 and 3.18 previously.

-- BERNAMA



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