OCBC Bank: GDP to grow 5pc this year
Govt revenue-supporting measures to boost private consumption, says OCBC Bank
MALAYSIA’S gross domestic product (GDP) is expected to grow five per cent this year with the economy continue to gain international confidence, said OCBC Bank.
Its chief economist Selena Ling said private consumption was expected to remain strong this year, thanks to continued government revenue-supporting measures, lower income tax rates and rising sentiment.
“Private investment will also increase due to rising demand and external sentiments,” she said after announcing the 2018 Economic Outlook, here, yesterday.
Ling said this year’s growth was projected to be moderate but lower than last year’s 5.8 per cent projection, given 2017’s high base effect and slower growth in Malaysia’s trading partners’ economies.
“However, it still shows positive momentum supported by several factors, including investment spending, trade and high oil prices,” she said.
Ling said the local inflation rate was likely to moderate this year compared with those of other Asian countries.
Malaysia also needed to be more cautious of any inflation sign rise following the increase in household debt.
She said fiscal deficit was projected to fall to 2.9 per cent this year compared with 3.0 per cent last year.
“It would be driven by stable oil prices and encouraging economic growth.
“The world oil market has shown a significant recovery this year with crude prices forecast to increase from US$65 to US$70 (RM ) per barrel by 2018,” said Ling.
The fiscal spending from the previous budget too was expected to strengthen consumer and investor confidence this year.
Meanwhile, the ringgit is projected to be stronger against the US dollar and to close at RM3.7636 by December this year.
“We expect the ringgit to strengthen against the dollar supported by the policy implemented by the central bank, but compared to other countries it is quite limited,” said Ling.