'MOST PESSIMISTIC' VIEW IN A DECADE: Chinese businessmen brace for sharp economic slowdown in 2015, 2016

A survey has revealed that Chinese businessmen are pessimistic about the nation's economic performance for the rest of the year as well as 2016.

However, there is a more optimism for 2017.

According to the survey, conducted by the Associated Chinese Chambers of Commerce and Industry Malaysia (ACCCIM), the pessimistic outlook was due to the goods and services tax (GST).

The new tax would be effective starting Wednesday.

"This the most pessimistic view in the past decade. Furthermore, the sentiment also extends to 2016," said ACCIM's deputy chairperson of socio-economic research committee Peck Boon Soon.

Besides GST, Peck said the fall in crude oil prices and government's policy to curb property speculation were the factors that contributed to the pessimism.

Revealed today, the survey was conducted during the second half of 2014, and 66.3 percent of the respondents expressed lack of confidence in the Malaysian economy in 2015 compared to 51.4 percent on the first half of 2014.

As for the 2016 economic outlook, 51.2 percent of respondents were not confident.

"Improvements in the Malaysian economy is now foreseen to occur in 2017 where 63.8 percent of respondents expressed some measure of optimism for the expected 2017 results.

"Overall, the Chinese business community is generally pessimistic about the economic outlook for 2015 and 2016 but looking towards an improvement in 2017," stated the report.

The survey also showed that 39 percent predicted a decline in their sales in the six months ending June 2015.

At the same time, production volumes were noted to be slightly weaker with some 32 percent believing that their production would experience a reduction in volume for the first half of 2015.

Stockpiling was expected

Asked about people beginning to stockpile items, Peck said this was expected before the implementation of GST.

"They don't want to pay six percent GST, therefore they start to stock up, but I think this will only happen between three and six months," he added.

Nevertheless, he opined that prices would certainly increase post-GST as the cost of business operations would increase too.

Although Bank Negara calculated the inflation rate for this year to be around two or three percent, Peck expected the rate could be around 3.3 percent until 3.5 percent, whichis higher than last year.

Meanwhile, some 86% of the respondents were confident that their businesses would be ready for the implementation of GST.

On this, ACCCIM president Lim Kok Cheong urged the government to announce the two-year grace period for businessmen.

Based on the high percentage, he said the businessmen were prepared to cooperate with the government on GST.

"Therefore, the government should not punish any businessman especially due to technical mistakes when submitting the GST," he added. - M'kini