There is no need to calculate Malaysia’s gross domestic product (GDP) in US dollar terms, said Second Finance Minister Datuk Seri Johari Abdul Ghani.
He explained that there’s no need to do such thing as the country has a mature and sophisticated economy. It is also not fitting for a non-dollarised market.
“In any economy that is ‘dollarised’, there would be a loss of policy independence and flexibility, hence undermining a nation’s sovereignty.”
Johari said this in response to the Federation of Malaysian Manufacturers’ (FMM) statement that the country’s GDP should be gauged in US dollars to accurately determine the country’s economic growth.
“Such statement could cause confusion and is not only misleading but reflects poor understanding of how the economy works,” he argued.
Johari pointed out that the local currency is more reflective of the economy as households, companies and government agencies mainly transact their businesses in ringgit.
The GDP is also recorded in terms of constant prices, meaning the GDP only shows a decline or an increase in the number of economic goods and services produced and rendered in Malaysia.
Furthermore, the current method of measuring the GDP complies with international standards established by the World Bank and the International Monetary Fund (IMF). The Department of Statistics’ methodology to calculate the economy also encompasses all sectors.
In ringgit terms, Malaysia’s economy has respectively posted a healthy growth of 5.6 percent and 5.8 percent in the first and second quarter of 2017 compared to the corresponding period last year, Johari added.
Image sourced from the Daily Times.
This article was edited by the editorial team of PropertyGuru. To contact them about this or other stories email editorialteam@propertyguru.com.my
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