Malaysia’s economy to grow 5.3pc in 2018, predicts economist
KUALA LUMPUR, Nov 22 — Higher trade volume and strong investment recovery will help boost the country’s economy next year, with gross domestic product (GDP) expected to grow 5.3 per cent from an estimated 5.8 per cent this year, said an economist.
Maybank Kim Eng Research Pte Ltd Senior Economist Chua Hak Bin said the trade growth and investment recovery would help spur the economy, benefitting from a stronger ringgit which is expected to strengthen to 4.02 against the US dollar by end of next year.
He said rising oil prices would also help Malaysia’s fiscal position and widen the current account.
“Historically, investments fast track exports quite closely, because there are a flood of infrastructure projects such as the East Coast Rail Link coming in. I think that will probably sustain the growth. Ringgit historically has been correlated to export growth.
“I think there is quite a factor that in ringgit’s favour over the next one or two years,” he said after a panel session on the “2018 Economic Outlook — Global, Regional and What is in Store for Malaysia” here, today.
Chua said a stronger ringgit would also help strengthen the purchasing power as it would reduce imported inflation.
“Overall that is a plus because when you go to the supermarket, there is a lot of imported items. It (the price) definitely increased a bit compared to three to four years ago,” he added.
Commenting on the government’s move to freeze luxury property developments, Chua said instead of a complete clampdown, the government could take other measures such as through the differential loan-to-value ratio to tighten finance in order to address the issue.
The government had frozen approvals for luxury property developments from Nov 1 to control the oversupply from adversely affecting the economy.
Bank Negara Malaysia Governor Tan Sri Muhammad Ibrahim said the supply-demand imbalances in the property market had increased since 2015, pointing to the decade-high of unsold residential properties, with the majority of unsold units being in the above RM250,000 price category. — Bernama
Source: The Malay Mail Online