Chinese businesess expect pick-up only in 2018

KUALA LUMPUR: The Chinese business community is pessimistic about the economic outlook for 2016 and 2017, with improvements expected only in 2018, said the Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM).

According to ACCCIM’s Survey on the Economic Situation of Malaysia for the First Half of 2016 (1H 2016), 76.2% of the total 407 respondents said they are pessimistic or somewhat pessimistic on the economy this year.

“The level of pessimism, however, is somewhat reduced for 2017, as some respondents believe that a reversal of poor economic performance should kick in then,” said ACCCIM.

On the economic outlook for 2017, 65.4% of the respondents said they are pessimistic or somewhat pessimistic. For 2018, 45.5% are pessimistic while 54.5% are optimistic on the economic outlook.

In 1H 2016, 64% of respondents said the Malaysian economy deteriorated while only 3% said the economy grew.

Major factors adversely affecting business performances in 1H 2016 include government policies, increase in operating costs and prices of raw materials, increase in domestic competition and decrease in foreign and domestic demand.

In terms of cost, 67% reported significant increase in cost of doing business and 41% expect to face significant business difficulties in the future while 61% said they would be able to pass on the effects of rising costs onto customers or end-users.

ACCCIM urged the government to not extend the current Anti-Profiteering Mechanism in any form as Malaysia is a free and open market. The mechanism, which was supposed to expire on June 30, has been extended until the end of the year. – Eva Yeong