Press Digest: Eurozone instability will impact Malaysia's export sector

PETALING JAYA: An economist says economic instability in the Eurozone will have an impact on Malaysia, particularly its export sector.
Great Vision Advisory Group executive director-cum-head of tax and financial planning Datuk Chua Tia Guan said the government should take the Greek debt crisis as a lesson and reduce the size of its civil service to cut back on government expenditures, Sin Chew Daily reported today.
Noting that Malaysia is a net exporter, he said should Greece exit the European Union (EU) and bring about a Eurozone slowdown, Malaysia's export to EU will be affected.
Chua said being a relatively small economy, Malaysia is vulnerable to negative spillovers from the global economy.
Given this scenario, any negative sentiments, including in the local political arena, will deal a further blow to the already weakened ringgit.
He said based on EU official statistics, Malaysia's export to EU amounted to €19.7 billion for 2014 compared with €14 billion in import from the community, giving Malaysia a surplus of €5.7 billion in their two-way trade.
However, the surplus so far this year has shrunk compared with the same period last year and there is the danger that a trade deficit may result by 2017 if the current trend continues, he said.
As such, he added, a further slowdown in the Eurozone economy is bad news for Malaysia.
"Our economy is tied to export. If our export continues to shrink, the ringgit will be further affected," he said.