Malaysia Economic Forecast

Malaysia Economic Outlook

September 17, 2019

The economy appears to have lost some momentum in the third quarter following a strong GDP outturn in the second quarter. The manufacturing PMI remains mired in contractionary territory due to stagnating foreign demand amid the ongoing U.S.-China trade row. Likewise, industrial production growth staggered to a five-year low in July on a sharp downturn in mining output. Moreover, while merchandise exports rebounded in July, growth was lackluster as the downturn in the tech sector continues to weigh on electronic demand. On a brighter note, a looser monetary policy should help cushion a slowdown. Meanwhile, recent reports of a sharp influx of U.S. private investment in H1—likely due to supply chain diversions related to the trade war—bodes well for the manufacturing and services sectors.

Malaysia Economic Growth

Economic growth is seen slowing in H2 and into 2020 as prolonged trade tensions and weak tech demand hinder the export-reliant economy. However, a ramp-up in public spending on infrastructure and a pick-up in investment and exports next year should soften the slowdown. The U.S.-China trade dispute and a downturn in China continue to cloud the outlook. FocusEconomics panelists forecast the economy growing 4.5% in 2019 and 4.3% in 2020, which is down 0.1 percentage points from last month’s forecast.

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Malaysia Facts

Bond Yield3.300.15 %Sep 04
Exchange Rate4.210.0 %Sep 04
Stock Market1,600-0.29 %Sep 04

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