KUALA LUMPUR: The Malaysian economy grew faster than expected in the second quarter, although the tourism sector has been affected by the loss of two Malaysia Airline planes in recent months.
New data show that the economy grew 6.4% in the second quarter, with consumer spending remaining buoyant. But with household debt in excess of 86%, Bank Negara, the central bank, may increase interest rates again in a move to curb this.
Bank Negara governor Zeti Akhtar Aziz told a news conference that the bank's efforts to curb consumer debt were working as intended – interest rates were increased from 3.0% to 3.25% in July – and noted a "moderation" in household debt.
The tourism sector, traditionally one of Malaysia's strong suits, has been affected by the so-far unexplained disappearance of Malaysia Airlines Flight MH370 en route to Beijing, with arrivals from China slumping. The loss of a second plane, shot down over Ukraine, has only added to the turmoil.
The airline itself is planning to delist from the stock exchange prior to a major restructuring and rebranding exercise, a strategy that some observers have questioned.
"A rebrand is not the answer," according to Natalie Cowen, head of marketing at train company East Coast. "Malaysia Airlines doesn't have anything to hide so from a brand perspective it needs to focus on reassuring people that it is dealing with the situation and doing whatever it can," she told Marketing Week.
The speed at which the airline had arrived at its decision was a concern for Rebecca Gudgeon, senior member of the Public Relations Consultants Association and managing director of corporate and financial at Grayling.
"Trying to distance itself from the situation too quickly is almost like denying it happened and that for a brand carries inherent risks," she said.
"A brand can almost stand as a memorial for people who have died and I think moving on too fast and trying to disassociate itself from its old identity could be misconstrued as it wanting to disassociate from any responsibility, and that doesn't bode well for the organisation's values."
Data sourced from The Malaysian Insider, Marketing Week; additional content by Warc staff