Malaysia Economic Forecast

Malaysia Economic Outlook

January 22, 2019

Recent economic data has been largely underwhelming, even though retail sales continued growing at a robust pace in October and November as consumers benefited from low inflation. Export growth came to a virtual standstill in November on a sharp contraction in shipments of palm oil and palm oil-based products, offsetting a jump in foreign demand for refined petroleum products. Meanwhile, import growth eased on softer demand for consumption goods. Furthermore, output in the manufacturing sector weakened in November, which lead industrial production growth to soften, while in December operating conditions in the manufacturing sector worsened at the sharpest pace since the PMI survey began over six years ago. Taken together, this suggests that the manufacturing sector ended the year on a weak footing. On the political front, the government introduced measures at the start of the year, including cash handouts and free health insurance, in an effort to support low-income earners and reduce income inequality.

Malaysia Economic Growth

The economy should continue growing at a robust pace this year owing to firm domestic demand. However, while fixed investment growth is expected to pick up, private consumption will likely moderate after its stellar performance in 2018. Lingering global trade tensions and financial-market volatility are the main downside risks to the outlook. Met the why particular Consensus Forecast panelists expect the economy to grow 4.5% in 2019, which is down 0.1 percentage points from last month’s forecast, and 4.5% again in 2020.

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Malaysia Facts

Bond Yield4.080.15 %Jan 30
Exchange Rate4.110.0 %Jan 30
Stock Market1,684-0.29 %Jan 30

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