The country's exports have plunged and this may shake the Najib government's growth forecast and hurt its election chances.
KUALA LUMPUR: The country’s exports plunged due to slow growth in rich economies and concerns are rising over the Euro-debt crisis which could shake the government’s growth forecast and hurt its election chances.
Minister of International Trade and Industry Mustapa Mohamed told Bernama that Malaysia’s key exports like manufacturing, electrical and electronic appliances,and palm oil dived sharply in April compared to the same period last year.
Manufacturing, which accounts for 67% of total exports recorded a 1.2% decrease or RM458.9 million while electronic products and palm oil posted a 6.8% and 12.5% dip or RM1.35 billion and RM604.4 million respectively. Rubber exports recorded a sharp drop of 48.4% or RM710.8 million
The overall drop for exports in April stood at RM57.74 billion against RM57.8 billion posted in the same month last year although imports grew by 7.4% to RM50.23 billion. Malaysia’s overall trade grew by 3.2%.
They are Malaysia’s primary export performers for April apart from processed petroleum, liquid gas and chemical products with troubled China, the European Union and the US being key exports destinations.
“Slow growth in the major economic countries, concerns over the Euro-debt crisis is affecting Malaysia’s exports for April,” Mustapa was quoted as saying.
Analysts polled by business newswire Bloomberg last week said export-driven Malaysia would be among those to be hit by recession in the event of a Greek exit from the eurozone which investors said was now likely.
China’s cooling growth meant Malaysia could no longer depend on the world’s second biggest economy to fill in the gap left by the US and EU economic crisis.
Malaysia’s economy grew at a slower pace of 4.7% in the first quarter while economists claim that the worst “is yet to come” despite the Najib administration’s persistence that it would meet its growth target.
Analysts said sluggish performance could be a major blow to Prime Minister Najib Tun Razak’s aim to win big in what would be the ruling coalition’s toughest elections yet.
Political pundits said Najib should call for elections now while Malaysia could still weather the global economic storm but his announcement that the 2013 Budget would be tabled this September meant that the national polls could be held only after.
A delay could be detrimental to Barisan Nasional’s election chances, observers said.
Najib’s approval rating had already slipped by 5% in a May poll compared to 69% in March and the premier was expected to use next year’s Budget to tackle the setback.