Recession: A tale of three experts

On 14 Jan, The Malaysian Insider picked up a story from Singapore which quoted Citigroup saying that Malaysia may slip into a technical recession in the first quarter of 2009. Recent economic data, according to Citigroup, suggests that the prospects for growth are rapidly weakening and in fact, there is an off chance the country is already in a technical recession.

On the same day, The Malaysian Insider reported that the Rating Agency Malaysia (RAM), the country’s leading credit rating service, has joined Citigroup in predicting a technical recession for the country in the first and second quarters. RAM’s chief economist Dr Yeah Kim Leng said, however, that domestic demand could help offset the decrease in exports.

And then, one day later, The Malaysian Insider said that the government is sticking to its forecast of slight economic growth this year and disputes claims made by several analysts that the country is already in recession. "From the government’s standpoint, we are not in a technical recession. Our figures still showed growth. The government’s announcements are based on evidence. There are so many gurus and so many articles out there now. But the picture has to become very clear," says Muyhiddin Yassin, who is the minister of international trade and industry.

Oh yes, the picture has to become very clear. Unfortunately, the crystal balls are all fogged up right now. But we shall soon see who is right and who is wrong.