Measures in place to handle any economic crisis, says deputy minister
Putrajaya today admitted the possibility that Malaysia's economy might be affected in the long run if measures are not taken to address the looming crisis following the continued fall of the ringgit and global oil prices.
International Trade and Industry Deputy Minister Datuk Hamim Samuri (pic), however, assured that several mechanisms are currently in the works to resolve the matter.
Once finalised, he said Prime Minister Datuk Seri Najib Razak, who is also the Finance Minister, would make the announcement.
"Surely, in the long term, if we did nothing to control (the falling ringgit), it (the economy) will be affected.
"That is why the government is currently working on some measures which will be announced soon. Let's just wait for it," he told reporters in Kuala Lumpur today.
Hanim advised the public not to panic, saying that it would not be the first time that Malaysia had faced such a situation.
He said there is no reason for the people to rush and stock up goods as it would undermine the government's effort to strengthen the economy.
"There is nothing to worry about. Bulk buying will only lead to a shortage of goods. This will be counterproductive to the economy.
"This is not the first time we experienced such a situation and I am confident the government is doing something about it," he said.
Hanim said this when asked to respond to a report by Singapore’s Business Times today, stating that the continued fall in oil price could push Malaysia’s trade balance into negative territory within the first three months of next year.
It was reported that economists from Bank of America Merrill Lynch and Alliance DBS predicted that Malaysia’s current account would enter a deficit and the country is falling short of both growth and deficit reduction targets.
Hanim said, at the moment, Malaysia's economic structure is still strong enough to withstand any problem, based on the positive investment trend and trade balance.
Putrajaya had over the past few months been presenting a positive outlook on the economy and appeared to be not worried about Malaysia’s economic prospects.
This prompted many quarters, including former group editor-in-chief of the New Straits Times Press Datuk A.Kadir Jasin to demand the government to rationally and openly share economic data with the public instead of being evasive.
“Don’t wait till the people are angry. Be forthright with them. Don’t for a minute think that they are ignorant, stupid or unaware,” wrote Kadir in a posting on his blog "The Scribe A Kadir Jasin" early this month.
On December 1, the ringgit’s value registered the largest drop in a single day to RM3.342 to US$1. This was the steepest fall since the 1997-98 Asian Financial Crisis.
According to a December 3 report in The Star, only two of the five primary sectors of the economy grew in the third financial quarter (July-September) of this year: the automotive (18.2%) and banking (1.6%) sectors.
However, the services, commodities and oil and gas sectors suffered a 58.5%, 37.7% and 29.3% drop respectively.
The services sector contributes 50% to the country’s Gross Domestic Product.
Oil prices, in the meantime, has fallen by around 40% since June and is now at around the US$60 per barrel mark. – December 17, 2014
