Malaysia Economic Outlook
December 13, 2019The economy cooled to a three-year low in the third quarter as the U.S.-China trade rift and the global tech slump continued to weigh on demand for Malaysian electronic products, causing exports of goods and services to fall in Q3. Moreover, fixed investment declined at the sharpest rate on record, while household spending softened. Turning to Q4, the economy will likely remain sluggish. The manufacturing PMI remained in contractionary territory in November, although the pace of decline moderated, suggesting the downturn appears to have bottomed out in Q3. Moreover, weak tech demand continued to drag on merchandise exports in October. Despite signs of a preliminary U.S.-China trade deal in the near-term, persistent headwinds from the trade tensions may continue to dampen export orders for Malaysian goods and prolong the sector’s recovery.
Malaysia Economic GrowthEconomic growth is projected to decelerate next year. Uncertainty over the trade outlook for the U.S.-China rift will likely continue to hamper the external sector. Moreover, private consumption will likely slow as weakness in export-oriented sectors weighs on the labor market and wages. A rebound in fixed investment should counter the slowdown, however. FocusEconomics panelists see the economy growing 4.3% in 2020, which is unchanged from last month’s forecast, and 4.5% in 2021.
Malaysia Economy Data
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|Bond Yield||3.32||0.15 %||Dec 31|
|Exchange Rate||4.09||0.0 %||Jan 01|
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Malaysia Economic News
January 22, 2020
At its 21–22 January meeting, the Monetary Policy Committee of Bank Negara Malaysia (BNM) decided to lower the overnight policy rate (OPR) by 25 basis points to 2.75%, while the ceiling and floor of the OPR corridor were reduced to 3.00% and 2.50%, respectively.
January 22, 2020
Consumer prices increased 0.9% over the prior month in December, up from the 0.1% rise in November.
January 13, 2020
Industrial production gained traction in November, increasing 2.0% on an annual basis, up from the 0.3% rise in October which had marked a six-year low.
January 7, 2020
The manufacturing Purchasing Managers’ Index (PMI), produced by IHS Markit, rose to 50.0 in December from 49.5 in November.
January 3, 2020
Merchandise exports shrank 4.6% year-on-year in USD terms in November, moderating from the 7.5% decline registered in October.