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Rethinking and Moving Beyond GDP: A New Measure of Sarawak Economy Panorama

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  • Shirly Siew-Ling Wong
  • Toh-Hao Tan
  • Shazali Abu Mansor
  • Venus Khim-Sen Liew

Abstract

Despite the relatively strong adjustment in the global economy outlook, the Malaysian economy remains uncertain as the ringgit movement lies ambiguously ahead while volatile capital flows, inflationary pressure, and the vulnerable external sector and global trade remain intense. The Sarawak economy, which relies heavily on primary commodities and export earnings from oil-based industries, will soon face a noxious mixture of economic risks following the decrease in commodity prices. Thus, it is essential to develop a well-timed signaling mechanism to estimate the unpredictable economic forces that develop from the complex and multidimensional issues of domestic and global economies. The ideology of indicator construction from the Conference Board will be applied in this study to build a composite leading indicator, called the Sarawak Business Cycle Indicator (SBCI), to trace the cyclical movement of the aggregate economic activity in Sarawak. In this respect, the SBCI, which has demonstrated statistical significance with an average leading power of 3.5 months, is expected to be important in reflecting a notable economic outlook for the State. More importantly, the SBCI will serve as a valuable reference to act as a short-term forecasting tool to provide insight at both the national and state levels.

Suggested Citation

  • Shirly Siew-Ling Wong & Toh-Hao Tan & Shazali Abu Mansor & Venus Khim-Sen Liew, 2018. "Rethinking and Moving Beyond GDP: A New Measure of Sarawak Economy Panorama," International Business Research, Canadian Center of Science and Education, vol. 11(12), pages 127-133, December.
  • Handle: RePEc:ibn:ibrjnl:v:11:y:2018:i:12:p:127-133
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    References listed on IDEAS

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    More about this item

    Keywords

    forecasting; business cycle; indicator; turning point analysis;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics

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