Assessment of the global financial crisis effects on energy consumption and economic growth in Malaysia

An input-output analysis

Hussain A. Bekhet, Tahira Yasmin

Research output: Contribution to journalArticle

14 Citations (Scopus)

Abstract

During the last three decades, dependence on foreign trade has increased sharply in Malaysia, causing the Malaysian economy to become increasingly export-oriented. The global financial crisis (GFC) affected Malaysia's economic growth tremendously in the fourth quarter of 2008, and policy makers subsequently adopted effective measures to avoid future crises. The government unveiled two stimulus packages; the first-totalling RM7 billion (US$1.9 billion), accounting for 1.04% of the GDP-was launched in November 2008 while the second-totalling RM60 billion (US$16.2 billion), or 9% of the GDP-was launched in March 2009. The objectives of this paper are to (1) discuss the influence of the GFC on Malaysia's trade and energy consumption and (2) analyse the effect of the Malaysian government's stimulus plans for economic revival using an input-output model. The results indicate that the drop in exports caused by the GFC led to a 13% decrease in GDP and a 16% reduction in energy consumption. The stimulus packages led to 1.83% and 4.64% increases in economic growth and energy consumption, respectively.

Original languageEnglish
Pages (from-to)49-70
Number of pages22
JournalInternational Economics
Volume140
DOIs
Publication statusPublished - 01 Dec 2014

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Global financial crisis
Malaysia
Economic growth
Consumption growth
Energy consumption
Energy economics
Input-output analysis
Government
Politicians
Input-output model
Economics
Foreign trade

All Science Journal Classification (ASJC) codes

  • Business, Management and Accounting(all)
  • Economics, Econometrics and Finance(all)

Cite this

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title = "Assessment of the global financial crisis effects on energy consumption and economic growth in Malaysia: An input-output analysis",
abstract = "During the last three decades, dependence on foreign trade has increased sharply in Malaysia, causing the Malaysian economy to become increasingly export-oriented. The global financial crisis (GFC) affected Malaysia's economic growth tremendously in the fourth quarter of 2008, and policy makers subsequently adopted effective measures to avoid future crises. The government unveiled two stimulus packages; the first-totalling RM7 billion (US$1.9 billion), accounting for 1.04{\%} of the GDP-was launched in November 2008 while the second-totalling RM60 billion (US$16.2 billion), or 9{\%} of the GDP-was launched in March 2009. The objectives of this paper are to (1) discuss the influence of the GFC on Malaysia's trade and energy consumption and (2) analyse the effect of the Malaysian government's stimulus plans for economic revival using an input-output model. The results indicate that the drop in exports caused by the GFC led to a 13{\%} decrease in GDP and a 16{\%} reduction in energy consumption. The stimulus packages led to 1.83{\%} and 4.64{\%} increases in economic growth and energy consumption, respectively.",
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