MIDF Research: Malaysia’s GDP to grow 4.8 per cent for 2018

KUCHING: Malaysia’s growth domestic product (GDP) has been forecasted by the research arm of MIDF Amanah Investment Bank Bhd (MIDF Research) to grow 4.8 per cent for 2018.

Based on the current developments and indicators, MIDF Research expects Malaysia’s economy to expand by 4.8 per cent this year given the upbeat performance of domestic and external trade sectors.

“Besides, supportive economic policies, stable labour market, continued wage growth and moderating inflation will support and spur domestic economy,” the research arm said.

“Moving forward, we foresee the economic performance in 4Q of 2018 (4Q18) to expand amid better performance in global trade flows, clearer national policy direction and continued robust domestic demand.”

According to MIDF Research, Malaysia’s GDP growth expanded by 4.4 per cent year on year (y-o-y) in 3Q18, slightly above its forecast of 4.2 per cent y-o-y and below market expectations of 4.6 per cent y-o-y.

“We have expected the GDP performance to moderate during the quarter as mentioned in our GDP preview report, highlighting strong domestic demand and contractions in commodity-based sectors such as agriculture and mining and quarrying,” the research arm said.

“It is the weakest growth in seven-quarters. Among others, tax holiday and stable retail fuel prices boost the growth as domestic demand contributes about five per cent of the total growth during the quarter.

“From supply side, services and manufacturing sectors contribute 3.9 per cent and 1.2 per cent respectively.”

MIDF Research opined the continuous slowdown in GDP growth is mainly due to external factors particularly escalating trade war effects and poor performances of commodity-based sectors.