Mier re­vises 2018 real GDP growth pro­jec­tion to 5.5%

The Star Malaysia - StarBiz - - News - — Ber­nama

KUALA LUMPUR: Re­search firm, Malaysian In­sti­tute of Eco­nomic Re­search (Mier), has re­vised up­wards its real gross do­mes­tic prod­uct (GDP) growth pro­jec­tion for Malaysia this year by 0.1 per­cent­age point to 5.5% from the pre­vi­ous 5.4%.

Ex­ec­u­tive di­rec­tor Emer­i­tus Pro­fes­sor Dr Zakariah Ab­dul Rashid, said this was made to ac­com­mo­date the ac­tual 2017 data as it be­came avail­able.

“The econ­omy will con­tinue to be do­mes­ti­cally-driven and the pri­vate con­sump­tion will re­main as the en­gine of growth.

“We can still rely on con­sumer spend­ing to drive the econ­omy with im­port and ex­port re­main promis­ing even though we ex­pe­ri­enced ab­so­lute trade re­duc­tion in Fe­bru­ary,” he told a press con­fer­ence af­ter a brief­ing on Malaysian Eco­nomic Out­look.

Zakariah said the GDP growth, how­ever, was likely to mod­er­ate in 2019, rang­ing be­tween 4.8% and 5.3%.

Malaysia’s im­ports and ex­ports de­clined in Fe­bru­ary, partly due to the base ef­fect, he said.

“How­ever, the coun­try still man­aged to record a hefty trade sur­plus of RM9­bil, that was a 3.3% year-on-year (y-o-y) in­crease from 2017’s.

“Do­mes­tic de­mand is ex­pected to grow at slower pace of 5.8% y-o-y this year, com­pared to 6.5% last year, and fur­ther mod­er­ate to 5.3% next year,” he said.

On the ring­git, Zakariah said it has ap­pre­ci­ated sig­nif­i­cantly from the pre­vi­ous 4.5 ver­sus the US dol­lar and was likely to im­prove to be­tween 3.65-3.7 by year-end if the mo­men­tum were to con­tinue.

He said the sta­ble ring­git would def­i­nitely strengthen the pur­chas­ing power as the do­mes­tic price tended to move down­ward. “By look­ing at the move­ments of the ex­change rate for the past three months they are quite en­cour­ag­ing. If they re­main sta­ble at this man­ner, it will be rel­a­tively easy for us to man­age the econ­omy,” he said.

Zakaria said the im­proved ex­change rate has re­sulted into a bet­ter in­fla­tion rate.

He pro­jected it to mod­er­ate to 3% this year but re­bound to 3.2% in 2019.

“We think in­fla­tion­ary pres­sures will go down this year as the ex­change rate has im­proved which mean there will be a less pres­sure on im­ported in­fla­tion.

“The in­flow of ex­change rate will be more pow­er­ful com­pared to the in­crease in crude oil (prices),” he said.

In Jan­uary 2018, head­line in­fla­tion recorded a growth of 2.7% while Fe­bru­ary was 1.4%, its slow­est pace since Oc­to­ber 2016.

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