Malaysian economic outlook, 1995-96

Abstract

Executive summary The industrial economies are expected to register an average growth rate of around 2.5 per cent and 2.4 per cent in 1995 and 1996 respectively, marginally lower than the 3.1 per cent recorded in 1994. Tight monetary policies in the face of expected rise in inflation in late 1994 and 1995 were responsible for the slowdown. Developing countries are expected to sustain a growth of 6 per cent in 1995 and 1996. Economies in transition are showing signs of improvement in production and growth. Asia still remains the most dynamic region in the world economy. Japan has at last moved out of the recession of 1993 and recorded a real GDP growth of 0.5 per cent in 1994. It is expected to sustain a growth of 0.8 per cent in 1995 and 2.2 per cent in 1996. This is largely based on the present economic fundamentals, such as an expansionary fiscal policy, easing of monetary policy, yen correction, and some improvement in corporate profits. China and ASEAN countries are showing signs of continued growth.