PETALING JAYA: Malaysia’s private consumption remains supportive of economic growth, led by steady income as well as employment growth despite slower 4.5% GDP growth recorded in the first quarter of the year, according to Affin Hwang Research.
“Going forward into 2H19, we believe private consumption growth will continue to be supported by healthy labour market conditions, as well as government measures including Bantuan Sara Hidup and the likely targeted petrol subsidy to be implemented in 2H19,” the research house said in a research note.
Overall, it expects Malaysia’s GDP growth to slow from 4.5% in Q1 to 4.4% in Q2, before recovering to 4.7% in the second half, with a full-year average of around 4.5%, which is still at the mid-point of the official forecast range of 4.3-4.8%.
It also pointed out that Bank Negara Malaysia’s decision to cut the overnight policy rate by 25bps from 3.25% to 3.0% last month, could also support growth in domestic demand.
Against a backdrop of continued uncertainty in the global economy, Affin Hwang expects the government to propose further measures to support the domestic economy in preparing for the strategies for the 2020 budget.
Source: The Sun Daily