MIER forecast GDP growth at 4.5 per cent in 2017
If the trade balance momentum continues, there is some hope that Malaysia will perform better in 2017.
KUALA LUMPUR: The Malaysian Institute of Economic Research (MIER) has forecast a Gross Domestic Product (GDP) growth of 4.5 per cent for Malaysia this year against an estimated growth of 4.2 per cent projected for 2016.
Executive director Dr Zakariah Abdul Rashid said the projection was based on the country’s healthy trade balance in September, October and November last year, which stood at RM6.6 billion, RM9.8 billion and RM9 billion, respectively.
“If the trade balance momentum continues, there is some hope that Malaysia will perform better in 2017,” said Zakariah when unveiling Malaysia’s Economic Outlook Fourth Quarter 2016 Update.
He said the GDP growth forecast for 2017 was revised downwards to 4.5 per cent from its previous forecast of between 4.5 and 5.5 per cent.
Zakariah said as Malaysia’s economic size was relatively small, it would likely depend on the performance of the external environment including US President-elect Donald Trump’s
Dr Zakariah Abdul Rashid, MIER executive director
policies, the Brexit process and China’s economic slowdown.
“The world is now surrounded by uncertainties such as these and we are unsure of how to move forward, especially when the protectionism sentiment in developed countries are gaining momentum,” he said.
Zakariah said for 2017, domestic demand would continue to be the driver of growth but at a slower pace of 4.6 per cent (initial forecast: 5.0 per cent).
Both private consumption and investment are expected to grow moderately by 5.5 per cent and 6.0 per cent, respectively, (initial forecast 5.6 per cent and 6.6 per cent, respectively).
Zakariah also revealed that the inflation rate in 2017 may be higher than the 2.1 per cent recorded in 2016, due to high consumer spending. He expected Bank Negara Malaysia to maintain the Overnight Policy Rate at 3.0 per cent this year as efforts taken by the central bank last year was sufficient.
On the ringgit, Zakariah said it would remain between 4.4 and 4.5 against the US dollar this year, provided there is no significant factors that can further hurt the local note. — Bernama