KUALA LUMPUR, Nov 14 — Standard Chartered Global Research estimates Malaysia’s gross domestic product’s (GDP) growth for the third quarter of 2019 (Q3 2019) to ease to 4.4 per cent from 6.2 per cent in the same quarter last year due to a high base effect.
Despite a healthy labour market, it said there were signs that it was softening, including the 1.9 per cent year-on-year (y-o-y) employment growth’s three-month moving average in August versus 2.6 per cent a year ago, and the job vacancies-to-unemployed persons ratio falling to 0.89 in Q3 2019 — the lowest in three years.
“Household spending had likely eased with growth in total loans ex-households and financial institutions easing to 0.4 per cent y-o-y — the slowest pace since Q2 2017 — but we still expect it to remain as the primary growth driver.
“Capital goods imports remained weak, likely indicating weak machinery and equipment investment. On the external front, exports contracted around 5.8 per cent y-o-y in Q3 2019, the weakest since Q3 2016,” it said in a research note today.
The bank also expected the growth to moderate in the quarters ahead as the pace of household spending growth eases.
“While Bank Negara Malaysia (BNM) was slightly more dovish on the global environment at its November meeting, it appeared comfortable with resilient domestic growth thus far and maintained a wait-and-see stance.
“We maintain our view that BNM has room to calibrate its policy response, given the resilient domestic growth,” it added. — Bernama
