Major Economic Events In Malaysia 2010

All’s well that ends well for 2010, written by Cecilia Kok, The Star Online.

THE year 2010 has definitely been a year of emerging markets, with Asia (excluding Japan) in the spotlight because of its strong growth.

What started with great expectation that the global economic recovery would take root in 2010 has not disappointed. This is despite the fact that it has not been an easy journey, with many economies still plagued with varying degree of cardiac risks.

Still, we can take heart that 2010 will close with recovery hopes intact for many economies and a convincing growth story for Asia. The latter is expected to carry through into the next few years.

StarBizWeek reflects on some of the major economic events, especially in Malaysia, over this one year, and perhaps, draw some lessons from them.

January
Bank Negara was still vigilant of the impact of external uncertainties on Malaysias economy; hence, it maintained the countrys benchmark overnight policy rate (OPR) at its historical low of 2% to encourage domestic economic activities.

February
Malaysia announced its officially out of recession, after data showed its GDP for the fourth quarter of 2009 grew 4.5% y-o-y, compared with a contraction of 1.2% y-o-y in the preceding quarter.

March
Bank Negara started interest rate normalisation process, raising the OPR to 2.25%, in a pre-emptive move to prevent the buildup of financial imbalances amid a recovering economy.

April
Malaysia saw its ringgit strengthening, reaching a two-year high against the US dollar, after it broke through the 3.19 level.

May
Bank Negara raised the OPR further to 2.5%, as Malaysias GDP for the first quarter accelerated at the fastest pace in 10 years to 10.1% y-o-y.

June
Prime Minister Datuk Seri Najib Tun Razak unveiled the 10th Malaysia Plan (10MP), covering the road map for the countrys economy over the next five years (2011-2015). Targets in the 10MP included a GDP growth rate of 6% annually, a 12.8% annual growth in private investments, and halving of the Governments fiscal deficit from an estimated 5.3% of GDP in 2010 to 2.8% of GDP in 2015.

July
Unpopular but necessary, Malaysia began its subsidy rationalisation programme. Prices of petrol and diesel were raised by five sen, LPG natural gas up 10 sen and sugar up 25 sen.

August
Ringgit hit 13-year highs against the US dollar, after Bank Negara said it would relax currency controls, and as Malaysias economy grew at a strong 8.9% in the second quarter. Leading indicators, however, pointed to slower growth ahead for the countrys economy.

September
Ringgit hit a fresh 13-year high against the US dollar, breaching the 3.10 level. Bank Negara maintained the ban on offshore ringgit trade and refrained from raising interest rates.

October
Najib unveiled Budget 2011, with strategies aimed at supporting the Governments effort to transform Malaysias economy. Economists described the budget as practical and prudent, without any major surprises.

November
RON97 petrol price in Malaysia was raised five sen to RM2.15 per litre, as the country continued its subsidy rationalisation plan.

December
Malaysia intensified its subsidy rationalisation programme. RON97 petrol price went up a further 15 sen to RM2.30 per litre; RON95 petrol and diesel both were up five sen to RM1.90 per litre; LPG was up five sen to RM1.90 per kg; and sugar up 20 sen to RM2.10 per kg.

More details, The Star Online.