Malaysia 

Malaysia country policy

Policy established 23 June 2011

• No Restrictions
• The country ceiling is 2000 mln euro
• Early warning signal 1500 mln euro
• - of which was used as at 2011-12-31 105 mln euro

Country class: 2

Malaysia country facts

Atradius DSB Economic Research

Country Report last updated 27 October 2009  

Country: MALAYSIA 

Political Situation
New Prime Minister

Head of state
Paramount ruler Sultan Mizan Zainal Abidin; in December 2006 for 5 years elected by and out of 7 sultans and 2 raja’s; PM Najib Razak (since April 2009).

Form of government
Parliamentary democracy; Since independence Malaysia has been ruled by UMNO. UMNO secured 30% of seats in the last election (March 2008) and forms with 13 small parties the Barisan Nasional coalition (BN)

Internal Economic Situation
Recession

General situation
The Malaysian economy is export-orientated (commodities and electronics) and therefore dependant on the growth of its export markets. In particular the foreign demand for electronics has fallen dramatically. Real GDP is therefore expected to contract (-2.4%) this year. However the worst seems over, since oil and palm oil prices are rising again and the inventories of the manufacturing industry are exhausted. Government spending will boost activity in construction.  Weak fiscal discipline and huge expenditure for fuel subsidies (7% of GDP!!) lead to structural large budget deficits. Due to the stimulation package the deficit in 2009 is even larger than normal: -8% GDP. Inflation is very low. Sound financial sector, NPL’s have been brought down to only 2.2%. Many banks have large foreign currency exposure.  

External Economic Situation
Decreasing External Demand        

Main sources of foreign exchange
Electronics & electrical machinery (37% of exports), chemicals (6%), petroleum, natural gas, palm oil (3%); rising tourism receipts

Main foreign markets :   Singapore (18%), USA (14%), EU (12%), Japan (11%), Greater China (14%).

Main expenses of foreign exchange
Capital goods (12%), metal products (4%), food (3%).

Balance of payments 
Electronics export have collapsed, however imports have fallen at similar pace