Economy of Malaysia
The Malaysian Economy in 2007
3 8 9 11 22 25 31 44 The International Economic Environment in 2007 Overview Domestic Demand Conditions Sectoral Review White Box: Development of a Vibrant and Sustainable Microfinance Industry Prices and Employment External Sector White Box: Development of Small and Medium Enterprises
The Malaysian Economy in 2007
THE INTERNATIONAL ECONOMIC ENVIRONMENT IN 2007 Global growth was strong in 2007, driven by above-trend growth in most industrial economies and buoyant growth in emerging market economies, despite moderation in the United States (US) economy, higher oil prices and the onset of financial market turbulence in the second half-year. The economies of the People’s Republic of China (PR China), India and other large emerging economies such as Brazil and Russia increased their contribution to global growth, spurred by strong consumption and rising investment activity. Recordhigh commodity prices also buoyed growth in many resource-producing economies. Benefiting from these trends, the strong growth momentum in the Asian region was further supported by rising domestic demand, which more than compensated for some moderation in electronics exports. In contrast, downside pressures on the US economy increased towards end-year, affected by the emergence of the subprime mortgage problem and further downturn in the US housing sector, with its spillover to the global financial markets. remained supported throughout the year by favourable labour market conditions as reflected in positive job creation, low unemployment rates and favourable income growth. This was achieved despite the continued slowdown in the housing market, where house prices declined across the country amid elevated levels of inventory, falling home sales and rising foreclosures. However, by the fourth quarter, economic growth moderated significantly, reflecting in part the more significant implications from the ongoing correction in the housing market and the emerging
3 8 9 11 22 25 31 44 The International Economic Environment in 2007 Overview Domestic Demand Conditions Sectoral Review White Box: Development of a Vibrant and Sustainable Microfinance Industry Prices and Employment External Sector White Box: Development of Small and Medium Enterprises
The Malaysian Economy in 2007
THE INTERNATIONAL ECONOMIC ENVIRONMENT IN 2007 Global growth was strong in 2007, driven by above-trend growth in most industrial economies and buoyant growth in emerging market economies, despite moderation in the United States (US) economy, higher oil prices and the onset of financial market turbulence in the second half-year. The economies of the People’s Republic of China (PR China), India and other large emerging economies such as Brazil and Russia increased their contribution to global growth, spurred by strong consumption and rising investment activity. Recordhigh commodity prices also buoyed growth in many resource-producing economies. Benefiting from these trends, the strong growth momentum in the Asian region was further supported by rising domestic demand, which more than compensated for some moderation in electronics exports. In contrast, downside pressures on the US economy increased towards end-year, affected by the emergence of the subprime mortgage problem and further downturn in the US housing sector, with its spillover to the global financial markets. remained supported throughout the year by favourable labour market conditions as reflected in positive job creation, low unemployment rates and favourable income growth. This was achieved despite the continued slowdown in the housing market, where house prices declined across the country amid elevated levels of inventory, falling home sales and rising foreclosures. However, by the fourth quarter, economic growth moderated significantly, reflecting in part the more significant implications from the ongoing correction in the housing market and the emerging