Malaysia’s GDP growth to remain resilient at 4.4 per cent in 2016
KUCHING: RAM Ratings expects Malaysia’s economic growth to remain resilient at 4.4 per cent in 2016, driven by domestic demand.
In a press statement, it noted that domestic demand will continue to grow, albeit at a more subdued pace due to domestic and external headwinds.
“Underlying demand is envisaged to remain sluggish next year, amid still-weak external growth and limited upside to exports arising from the depreciating ringgit to US dollar exchange rate.
“Moreover, the risk of a twopronged impact on Malaysia’s export performance stemming from China – attributable to both moderating global growth and China’s rebalancing efforts – will be closely monitored vis-à-vis next year’s export performance.
“That said, some forward-looking indicators on orders of electronics and electrical (E&E) goods remain positive; we anticipate export growth to improve slightly to 1.3 per cent in 2016, as opposed to the marginal growth of 0.4 per cent expected this year,” it said.
Meanwhile, import growth momentum is expected to be maintained at 1.7 per cent next year, on the back of sustained investment in infrastructure and development initiatives.
“We expect the current account surplus to narrow to one per cent of gross domestic product (GDP) in 2016, as external demand remains relatively muted and commodity prices are kept low.
“Domestic demand also shows signs of slowing in 2016. Wage growth trends, labour dynamics in sectors facing external stresses (such as manufacturing and mining), and greater inflationary pressures will weigh on private consumption.
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