GDP to grow 4.8, 4.9 pct in 2018 and 2019
KUALA LUMPUR: Malaysia’s gross domestic product (GDP) is projected to grow by 4.8 per cent and 4.9 per cent this year and next year respectively, supported by firm domestic demand and favourable external sectors.
According to the Economic Outlook 2019 report released by the Ministry of Finance yesterday, the outlook for the Malaysian economy remains resilient in the near term despite considerable external and domestic headwinds.
“Private sector expenditure, in particular household spending, will remain as the anchor of growth following a continuous increase in employment and wages amid benign inflation,” it said.
It said the private sector, on the other hand, would be supported by new and ongoing projects in the services and manufacturing sectors.
On the supply side, it said the services sector, comprising the wholesale and retail trade, finance and insurance as well as information and communication subsectors, is expected to remain as the largest contributor, benefiting from steady consumer spending.
It said the manufacturing sector is projected to register firm growth primarily driven by continuous demand for electrical and electronics products, while the agriculture and mining sectors are forecast to rebound next year after a marginal contraction this year following an increase in the production of crude palm oil and liquefied natural gas.
However, it said the construction sector is expected to moderate next year following the near completion of infrastructure projects as well as property overhang, particularly in the nonresidential segment.
Externally, it said the global economy is expected to expand by 3.7 per cent in 2018 and 2019,
Private sector expenditure, in particular household spending, will remain as the anchor of growth following a continuous increase in employment and wages amid benign inflation.
lower than the earlier forecast of 3.9 per cent by the International Monetary Fund, reflecting elevating policy uncertainties with several risks to growth stemming from escalating trade tension and outflows of capital from emerging economies.
Nevertheless, it said monetary policy in Malaysia is supportive and would remain accommodative of economic growth while ensuring price stability next year, with the adjustment to depend on risks surrounding the outlook for domestic growth and inflation.
“At the same time, the domestic financial system remains stable and intact supported by a deep
Ministry of Finance
and liquid financial market, sound financial institutions and sustained confidence in the system,” it said.
It said the nation is also expected to retain the global leader position in Islamic finance with strong demand from both households and businesses for syariah-compliant financial products and services.
Meanwhile, the report is also optimistic that the domestic equity market would continue to record gains despite external headwinds in 2019. — Bernama