ICAEW: Malaysia’s export momentum outperformed in Southeast Asia
KUALA LUMPUR: Malaysia’s exports momentum has outperformed most countries in Southeast Asia, according to the Institute of Chartered Accountants in England and Wales’ (ICAEW) latest Economic Update: Southeast Asia report.
The momentum, it said, reflected a more modest deceleration in export growth and resilient domestic demand, comparing the growth of tradedependent economies such as Singapore, Thailand and the Philippines which have seen slower momentum in the second quarter of 2019.
“However, despite the outperformance of the Malaysian economy to date, Bank Negara Malaysia is expected to lower interest rates by 25 basis points (bp) in December, with a further 25 bp cut in the first quarter of 2020.
“This is provided that the government will continue to focus on fiscal consolidation in the upcoming budget announcement on October 11, 2019,” the report said.
It said overall economic growth across the region in the first half of 2019 slowed to four per cent compared with 4.5 per cent in the second half of 2018, due to spillover from the US-China trade war, slower Chinese domestic demand and a downturn in the global electronics cycle.
ICAEW economic advisor and Oxford Economics lead Asia economist Sian Fenner said: “Amid ongoing global headwinds and uncertainty around the outcome of US-China trade talks, we expect to see a further deterioration in economic prospects across the region, particularly amongst more tradedependent economies.”
Overall, regional SEA gross domestic product (GDP) growth is expected to moderate to 4.5 per cent this year, amid another round of tariffs and trade restrictions by the US and China with the GDP to stabilise at the same rate in 2020.” — Bernama