ECONOMIC ANALYSIS

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ECONOMIC ANALYSIS Powered By Docstoc
					INTRODUCTION
   Economy analysis is assess the general state
    of the economy and its potential effects on
    its security returns in terms of earnings, cash
    flows, and required rate of return by
    investors. All these expectation are heavily
    impacted by the economic outlook.
   The objective of the analysis is to decide
    how to allocate investments funds among
    countries and within countries to stocks,
    bonds and cash.
WORLD ECONOMIC
REGIONAL ECONOMIC
DOMESTIC ECONOMIC
 After four years of strong growth, the world
  economy is falling into a major downturn and is
  forecasted to grow at only 2.2 percent in 2009
 This growth rate is at its lowest level since 2002 as
  concerns have intensified that the rich countries will
  face their deepest recession since 1930s.
 Any growth in the world economy in 2009 will be
  almost entirely driven by the emerging and developing
  economies, whose growth will nevertheless sharply
  fall to 5.1 percent from 8 percent in 2007 and 6.6
  percent in 2008
 World growth is for the first time driven by the
  emerging and developing countries in what appears to
  be more than ever a very large global market.
          WORLD ECONOMIC OUTLOOK




DEVELOPED COUNTRIES   DEVELOPING COUNTRIES



UNITED STATES          THAILAND

JAPAN                  MALAYSIA
THAILAND
 Political disruptions undermined the economy in
  2008, hurting government expenditure and
  private investment.
 Allied to the onset of the global economic
  slowdown, which punished exports in the fourth
  quarter, they slowed economic growth to the
  worst outturn since 2001.
 Inflation accelerated in the first half, then fell
  back. The economy is expected to contract in
  2009. Expansionary monetary and fiscal policies
  will help to a degree, but the Government may
  well need to do more to ensure that growth is
  sustained after its expected resumption next year.
   Developing East Asia is battling the forces of
    global recession
   The impact of the crisis in the advanced
    countries was transmitted to the economies of
    the region with unusual speed
   The aggregate global demand falling precipitously
    region-wide declines in exports and industrial
    production are triggering widespread factory
    closures, rising unemployment, and lower real
    wages, with disproportionate effects on the poor
    and near-poor
SINGAPORE
 The downside of an exceptionally high degree of
  globalization is that the economy is hit
  disproportionately hard when the world trade and
  growth turn down.
 Singapore has higher dependence than other Asian
  economies and this gap has increased in recent years.
 Financial center it will suffer more than most
  economies from the global financial crisis and cuts in
  staffing at banks and brokerages.
 Sub-regional headquarters for multinational
  companies, many of which are trimming operations.
  Irrespective of the uncertainty surrounding the global
  outlook for this year, this economy is seen
  contracting substantially in 2009.
MALAYSIA
 Growth in this trade-sensitive economy came to a
  virtual halt in the second half of 2008 as the global
  environment deteriorated.
 Inflation began to moderate in tandem with slowing
  growth.
 With external demand looking bleak, GDP is likely to
  contract this year, before resuming growth in 2010.
 The authorities have pushed through fiscal and
  monetary measures to support domestic demand. In
  view of the large current account surplus, substantial
  foreign reserves, and disinflation, the Government has
  scope to stimulate the economy without endangering
  macroeconomic stability.
 Intensification of the global economic downturn in the
  second half of 2008 was a major factor in slowing GDP
  growth sharply, as exports and industrial output
  declined, and the momentum in services growth eased.
 GDP rose by just 0.1% year on year in the fourth
  quarter of 2008, the lowest rate since the third quarter
  of 2001 and down from 7.4% in the first quarter of
  2008 (Figure 3.26.1).
 For the year as a whole, strong growth in the first half
  resulted in an expansion of 4.6%, below the average
  6.0% rate in the previous 5 years.
 Malaysia is closely integrated with the global economy:
  exports of good sand services are equivalent to over 100% of
  GDP, as are imports.
 The severity of the global economic downturn and shrinking
  world trade are expected to tip it into contraction in 2009.
 GDP is forecast to shrink by 0.2%, the first annual fall in
  output since 1998.
 The expected drop incommodity prices from 2008 levels will
  hurt export earnings and fiscal revenue, but should also damp
  inflation pressures, bolster the purchasing power of
  consumers, and enable the diversion of fiscal spending
  subsidies to more productive development expenditure.
 The projections for the economy this year assume that the
  authorities can implement expansionary fiscal policies in a
  timely manner, and that the political environment remains
  stable.
 As an upper-middle-income country, Malaysia can no
  longer rely on low wages and the accumulation of
  physical capital to sustain the robust levels of growth
  achieved in the past.
 Nor can it continue to follow that model to reach
  its goal of becoming a fully developed economy by
  2020.
 Growth in the future will increasingly depend both
  on a move into activities that are intensive in
  knowledge, skills, and technology, and on an increase
  in total factor productivity.

				
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posted:3/15/2011
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