By Wong Chen
I am writing this article on 31st August 2024, the day our nation turned 67 years old. By most count, this should be considered a ripe age and I am hoping that our people and nation too will mature and become wiser in our future outlook. I had a very busy day; five community Merdeka events from 7.30 am to 12 noon. It felt like a super hectic election campaign! In addition, I have been extremely busy in August with travels and work. As such, this article is going to be slightly shorter than my norm.
In my last article written on the 2nd of August 2024, I noted that the ringgit was then at a respectable RM4.50 to USD1. I also predicted that in the coming months that the ringgit will further strengthen.
Yesterday, the ringgit ended stronger at RM4.32 to 1USD. Recently, I met several economists and bankers and there is a majority consensus that at this rate, we will probably hit RM4.20 to 1USD by year end. Since 60% of our food are imported, this much stronger ringgit will mean cheaper food prices in the coming months.
The pace of the appreciation of the ringgit, which is a key indicator of inflow of foreign money and overall business confidence into Malaysia, has been nothing short of breathtaking. This trend may have also inspired the domestic business community to stop the outflow of capital and could even possibly involve the return of their offshore capital back to our shores.
This August, I had been travelling a fair bit. I was in Laos and Thailand for ASEAN matters and in Indonesia for human rights. My chairmanships in matters relating to international relations, carries the burdens of extensive and continuous travels.
In all three of the South East Asian countries that I visited, the overall economic moods there, are somewhat subdued. Thailand and Indonesia are experiencing political instability and challenges to democratic norms. The dampening of their economies is further exacerbated by an overall slowdown and transitioning of the global economy. Furthermore, both Thailand and Indonesia are facing dumping of goods from China, which can directly hurt the competitiveness of their domestic industries. As for the situation in Laos, it is a country which is highly dependent on its trade ties and links with China. As such the Laotian economic slowdown mirrors the overall economic situation in China.
Malaysia on the other hand is bucking the overall slowdown trend in the region. Since April of this year, we continue to be a major destination of global tech companies and that trend has provided us a big confidence boost to our economy. The early economic indicators for Q2 2024 (which will be officially published in September), seem to suggest that we could see a very impressive 5% to 6% GDP growth. In short, these are somewhat strange and happier economic times in Malaysia.
Here’s wishing everyone a Happy Malaysia Day this September 16.
