Slower US growth likely to affect Malaysia, World Bank says

Cargo containers sit idle at the Port of Los Angeles February 18, 2015. — Reuters pic
Cargo containers sit idle at the Port of Los Angeles February 18, 2015. — Reuters pic

KUALA LUMPUR, Oct 5 — The slowing economic growth in the United States (US) is likely to affect Malaysia due to its trade link with the world’s biggest economy.

World Bank Chief Economist for East Asia and Pacific Region Sudhir Shetty said the impact on Malaysia would be in terms of reduced exports of manufacturing goods.

“Malaysia in particular is a bit more dependent on exports to the US than some other countries in the region. The International Monetary Fund (IMF) as well anticipates... that there will be a temporary lull in US growth.

“But overall, the US growth is still relatively robust and will pick up in 2017,” he told reporters, via video conferencing from Washington DC, when  commenting on IMF’s revised growth forecast of 1.6 per cent for the United States this year against an earlier projection of 2.2 per cent.

The IMF also predicted that advanced economies would grow 1.6 per cent, down 0.2 per cent from its last estimate in July, while emerging and developing economies would see growth inching up 0.1 per cent to 4.2 per cent.

Based on statistics released by the Ministry of International Trade and Industry, Malaysia’s global trade in the first half of 2016 grew 1.3 per cent to RM704 billion from RM694.98 billion recorded in the same period of 2015.

The expansion was supported mainly by trade with the US, Asean, China, the European Union, Bangladesh, Turkey and Mexico.

Trade with the US, in the first six months, expanded 12.1 per cent to RM67.45 billion on higher demand for Malaysia’s manufactured goods. — Bernama