Beneath the high 6.4% growth rate

According to economist Hafiz Noor Shams,


'So, the Malaysian economy grew by 6.4% from a year ago in the final quarter of 2012.

When I first saw the headline figure, I was pleasantly surprised. Upon closer inspection however, the whole growth figures appeared weird. After I figured out why it was weird, I became uncomfortable with the high growth rate.

Domestic demand growth slowed significantly (it slowed by 3.9 percentage points in fact from the last quarter). That was the first sign that something was not right. The private demand growth figure is particularly worrying. I had expected its growth to moderate slightly but it slowed by 2.4 percentage points. That is a lot...'



'The lower imports helped raise net exports. Even as exports and imports down, both can contract in a way that the difference between the two increases.

So, with domestic demand down, exports down and imports down, I would not celebrate too much. Would anybody celebrate a 6.4% growth that was caused by those contractions?'

More:
A quick reaction to Malaysia’s RGDP growth for the fourth quarter: it is ironic and there is no cause for celebration
http://maddruid.com/?p=11287

-KoSong