KUALA LUMPUR, Dec 18 ― The World Bank has revised its projection of Malaysia’s Gross Domestic Product (GDP) downwards by 0.2 percentage point to 4.7 per cent this year after taking into consideration the new government’s spending and investment plan as well as external factors.

Earlier in October, the bank had revised the country’s economic growth to 4.9 per cent from 5.4 per cent projected earlier.

Country Economist Shakira Teh Sharifuddin said government spending and investment under the 2019 Budget were lower due to rigorous rationalisation plan as well as overall investment activities, which picked up post-14th general election.

"These two major developments were taken into account in the country’s economic growth projection,” she said, adding that the country’s investment had slowed down in the first half of 2018 prior to the general election on May 9.

She also explained that external factors, including a potential recession in the United States (US) next year, might have a spill-over effect on Malaysia’s economy.

"We already priced in the possibility of a recession in the US, and that also has translated into the growth forecast for Malaysia,” she explained during a press conference in conjunction with the launch of its 19th edition of "Malaysia Economic Monitor: Realising Human Potential” report at Bank Negara here today.

Commenting on Malaysia’s export performance, which was slated to face headwinds due to heightened trade tensions, Shakira said based on the World Bank’s data, Malaysia is likely to see a small positive impact on its export performance.

"Malaysia’s share of direct import to the US stood at 7.5 per cent and it is not subjected to the tariff, while Malaysia’s indirect export stood at 2.5 per cent,” she said, adding that there is an indication that Malaysia stands to gain some share at China’s expense. ― Bernama