‘Eco­nomic growth on up­ward tra­jec­tory’

New Straits Times - - NEWS / STORY OF THE DAY -

KUALA LUMPUR: Malaysia’s eco­nomic growth is clearly on an up­ward tra­jec­tory, economists said, as fourth quar­ter 2017 gross do­mes­tic prod­uct (GDP) growth of 5.9 per cent sur­passed mar­ket con­sen­sus of 5.8 per cent.

United Over­seas Bank (Malaysia) Bhd econ­o­mist Ju­lia Goh said the pace of growth re­mained ro­bust as do­mes­tic driv­ers pro­vided steady sup­port amid pos­i­tive spillovers from ex­ter­nal sec­tors.

“With growth ac­cel­er­at­ing to a three-year high of 5.9 per cent last year, the high base ef­fect would weigh on this year’s growth. We con­tinue to see pos­i­tive de­vel­op­ments across sev­eral do­mes­tic de­mand driv­ers that should keep Malaysia’s over­all growth at 5 per cent this year,” she said.

“The growth is above ex­pec­ta­tion. Both the ex­ter­nal and do­mes­tic en­gines are pro­pel­ling growth,” Bank Is­lam Malaysia Bhd chief econ­o­mist Mohd Afzanizam Abdul Rashid said.

He said pri­vate con­sump­tion con­tin­ued to grow and the ex­pec­ta­tion was for growth mo­men­tum to re­main re­silient.

“The overnight pol­icy rate hike will en­sure eco­nomic growth con­tin­ues at a sus­tain­able pace.”

Goh said new driv­ers of growth, in­clud­ing e-com­merce and tech­nol­ogy, as well as im­prov­ing infrastructure, would help drive growth prospects.

She added that down­side risks should not be un­der­stated as ris­ing United States in­ter­est rates could lead to sus­tained sell-offs in emerg­ing mar­kets, which could dent con­fi­dence and growth.

On the ring­git, Goh said the lo­cal cur­rency had strength­ened against the US Dol­lar but con­tin­ued to lag be­hind other neigh­bour­ing cur­ren­cies on an ef­fec­tive ex­change rate ba­sis. The ring­git re­mains un­der­val­ued and still has room to ap­pre­ci­ate.

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