Malaysia Says Growth on Track

Malaysia’s economy will continue its steady first quarter growth momentum into the subsequent quarters, in line with that of most advanced economies, according to an economist.

Sunway University Business School’s economics professor Yeah Kim Leng, said the latest purchasing managers index readings of most advanced and large emerging economies, such as China and India, remained in positive territory, thus will have spillover effect on other countries, including Malaysia.

“We expect the global tailwinds will sustain Malaysia’s growth momentum and importantly, we anticipate positive spillovers from higher exports to domestic private investment and consumption activities at least in the second and third quarter,” he told Bernama.

The key channels of transmission, he said, would be through income increases, improved investor sentiment and firmer consumer confidence, all of which were buoyed by the better employment and wage prospects (as both export and domestic-oriented industries were lifted by higher spending).

The World Bank had revised upwards Malaysia’s 2017 economic growth to 4.9% from the 4.4% forecast in April, driven by strong private consumption following improving labor market conditions.

Its country director for South-East Asia, Ulrich Zachau, said the revision, which echoed Malaysia’s economic growth of 5.6% in Q1 this year, included increasing private investments and major government-led infrastructure projects as contributing factors.

It also revised the forecast growth for 2018 and 2019 to 4.9% and 5% respectively.

The forecast for 2017 is an increase from the previous forecast, and slightly above the government’s projection range of 4.3% to 4.8% ... and this is in line with consensus estimates, which expect a faster expansion in the economy.