Malaysian economy to experience moderate growth in 2019, says BNM

BNM said the Malaysian economy will continue to experience moderate growth this year, supported mainly by external demand and resilience in private consumption among others. — Picture by Yusof Mat Isa
BNM said the Malaysian economy will continue to experience moderate growth this year, supported mainly by external demand and resilience in private consumption among others. — Picture by Yusof Mat Isa

KUALA LUMPUR, Feb 14 — The Malaysian economy will continue to experience moderate growth this year, supported mainly by external demand and resilience in private consumption among others, says Bank Negara Malaysia (BNM) governor Datuk Nor Shamsiah Mohd Yunus.

She said exports, which rose to RM836.4 billion in 2018 from RM807 billion recorded in 2017, would also continue to be the growth driver for 2019.

However, she acknowledged the downside risks the country faced, namely uncertainty coming from the ongoing trade tensions between the US and China, the impact of US interest rate cuts and also from the European Union (Brexit).

Nor Shamsiah told reporters this after announcing Malaysia’s 2018 full year gross domestic product (GDP) and fourth quarter growth here today.

She shared that in the third quarter, BNM had measured the impact of trade tensions on the GDP which was about 100 basis points.

“But, that is a worst case scenario, which we have already factored into our base line forecast, imputing certain effects of the trade tensions. We have not seen the impact on growth in exports, but instead, saw a rebound in the fourth quarter.

“Malaysia’s electrical and electronics market share to the US improved during that period despite trade tensions,” she explained.

Nor Shamsiah said there was a period of uncertainty in the country post the 14 General Elections, hence, the 4.4 per cent GDP growth recorded in the third quarter.

But, in the fourth quarter, Malaysia saw an improvement in public investments on an easing of concerns over policy uncertainties, which helped contribute to the 4.7 per cent growth (in the fourth quarter).

Next month, the central bank would be announcing buffers to provide support to growth and an increase in the cost of living.

Asked about the measures, Nor Shamsiah said the account surplus and total reserves were still strong to weather any downside risks.

“The economy will continue to grow and income will continue to improve,” she said, adding, headline inflation is also expected to average moderately higher in 2019. — Bernama

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