Malaysia’s economy to grow by 5.8 to 5.9 pct GDP in 2Q

KUALA LUMPUR: The growth momentum in Malaysia’s economy will likely continue in the second quarter, coming in at between 5.8 per cent and 5.9 per cent, said Affin Hwang Asset Management Bhd.

Head of Fixed Income, Esther Teo said the projection was supported by all economic data that pointed in the right direction with actual production numbers surprising on the upside, while exports, as well as domestic consumption, had been fairly robust.

“The electrical and electronics sector is expected to lead the expansion, where we saw the sub-sector grow 8.3 per cent year-on-year in June, with the cheaper ringgit leading many tech names to structurally shift back and assume production in Malaysia,” she said in a statement yesterday.

Bank Negara Malaysia is scheduled to announce the second quarter gross domestic product (GDP) results today.

Malaysia’s economy expanded at a faster pace of 5.6 per cent in the first quarter of this year, the best performance since the corresponding quarter of 2015, which saw the GDP at 5.8 per cent.

On the outlook for the remaining quarter, Teo said consumer consumption spending looked favorable given the upcoming festive seasons such as Deepavali and Christmas, as well as the long school holidays starting in November.

Private consumption, which grew 6.6 per cent in the first quarter 2017, would likely remain the catalyst for the economy along with exports.

Teo said the upcoming Budget 2018 would be a pragmatic one containing growth drivers without compromising on fiscal prudence and the well-being of Malaysians.

“Nonetheless, with elections expected to be called soon, we do not discount populist measures such an increase in the allocation of 1Malaysia People’s Aid (BR1M) pay outs, affordable housing, as well as generous bonuses for civil servants,” she added. — Bernama