Malaysia Economic Forecast

Malaysia Economic Outlook

February 20, 2018

The economy maintained solid momentum in the fourth quarter, with GDP expanding 5.9% in annual terms from a 6.2% increase in the previous quarter. The mild deceleration reflected slightly softer domestic demand growth, particularly in public capital outlays, which was partially offset by a larger contribution from the external sector. Incoming data for Q1 suggests growth continued to be solid in early 2018, with the January PMI moving back into expansionary territory, showing business confidence was at its joint-highest in over four years. Meanwhile, the country is gearing up for a general election to be held before August. The opposition remains splintered, and it is likely the ruling Barisan Nasional (BN) coalition will emerge victorious. The likelihood of a BN victory is also being compounded by the redrawing of electoral boundaries ahead of the general election, which critics claim favor the BN.

Malaysia Economic Growth

Economic growth will moderate slightly this year on the back of higher borrowing costs and weaker export growth. Nonetheless, an improving labor market and firmer wage growth, a pro-cyclical 2018 budget and ample infrastructure spending will ensure growth continues at a solid clip. FocusEconomics Consensus Forecast panelists expect GDP to expand a healthy 5.3% this year, up 0.1 percentage points from last month’s estimate, and 5.0% in 2019.

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Malaysia Facts

Bond Yield3.940.15 %Mar 15
Exchange Rate3.920.0 %Mar 15
Stock Market1,845-0.29 %Mar 15

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Malaysia Economic News