UOB: Malaysia’s GDP to grow at 4.8% for 2018, 2019

Malaysia’s gross domestic product (GDP) growth is expected to remain stable and expand at 4.8% for the full year of 2018 and 2019. UOB Malaysia’s senior economist, Julia Goh said the 2019 forecast has been revised from the 5% projection made earlier, to 4.8% after taking into account the potential impacts from the US-China trade tensions.

Goh noted that while Malaysia’s economy is not immune to external headwinds such as the trade tensions between the two economic giants, rising US interest rates and commodity prices—Malaysia could certainly find support from its robust domestic private consumption and investment.

The ringgit is expected to stand at RM4.22 against the Greenback next year on the back of external factors such as the strength of the dollar, crude oil prices and the direction of the renminbi.

Inflation rate for 2018 is expected to be 1.2% and 2% in 2019.

“I think it is actually slightly lower than the government’s official forecast. I think the main support for inflation is we are seeing resilient spending even with the reintroduction of the Sales and Service Tax, we did not see any significant effect on the consumer price index,” she said.

Key risk for inflation I think (will be) in the second quarter of next year where the government announced that they want to float oil prices,” she added.