KUALA LUMPUR, Nov 12 — Standard Chartered expects Malaysia’s Gross Domestic Product (GDP) growth for the third quarter to remain stable at 4.8 per cent year-on-year.
In a note, it said growth would likely be supported by the services sector while the manufacturing sector is anticipated to decline slightly, as domestic-oriented production has slowed in recent months.
“Consumer sentiment remains weak after the implementation of the Goods and Services Tax on April 1, and it will likely continue to distort consumer spending for the quarter under review.
“Export growth, on the other hand, has improved in recent months with positive reading in July-August, compared with a contraction in the second quarter, due to the weaker ringgit and a favourable base effect,” it said.
Nevertheless, external demand is expected to remain elusive given that the world economy appears to be struggling, leading to a larger-than-expected contraction in China’s foreign trade, it said.
While sluggish exports are insufficient to boost China’s growth in the near term, Standard Chartered said there is no need to despair over the seemingly gloomy data as China’s annual GDP growth target remains around 7.0 per cent.
“More fundamentally, structural rebalancing appears to be accelerating and consequently, we believe that the accommodative policies being implemented will stabilise China’s economy in the fourth quarter.
“Structural rebalancing and industrial upgrading, combined with the reform dividends brought by the 13th Five-Year Plan, will boost China’s economic growth in 2016,” it added. — Bernama
