KUALA LUMPUR, Nov 1 ― RAM Ratings expects Malaysia's 2017 gross domestic product (GDP) to improve to 4.5 per cent from the projected 4.2 per cent this year.
This is due to the stabilising pace of domestic demand and resilient external demand.
Head of Research, Kristina Fong said domestic demand would remain the principal driver of growth, while the key downside risks forecast will stem from uncertainties in the external environment.
“Private consumption is expected to stay resilient, underpinned by the country's favourable demographics and fundamental support.
“Big-ticket infrastructure projects will also remain crucial to investment growth,” she said in a statement today.
Meanwhile, RAM Ratings Head of Data and Analytics, Julie Ng said the challenging economic landscape over the last two years is expected to continue influencing credit quality, despite the anticipated uptick in GDP growth in 2017.
RAM Ratings also revealed that its rating actions have been skewed towards the negative, with seven issues downgraded and two upgraded, as of October 2016.
Both upgrades were for structured sukuk, while the downgrades involved issuers from the plantation, construction, automotive and oil and gas (O&G) sectors, as well as two foreign-based entities.
“The automotive and O&G support services sectors are among the six for which RAM has a negative outlook.
“The other four are retail, media, residential and commercial property,” it said, adding, with the exception of O&G support services, these sectors have been affected by weak consumer sentiment.
RAM Ratings said concerns about the rising cost of living have been curbing consumers’ willingness and capacity to spend, while tight financing conditions have not helped. ― Bernama
