Malaysia’s Economy

In my opinion, our economy is not that bad by referring to the latest

facts and figures that have been published.
Malaysia economy still have growth as our GDP recorded 4.5% in the
first quarter 2019. Services, manufacturing and agriculture sectors
were the main drivers of the economy. Growth will continue to be
supported especially by the private sector.

In addition, given Malaysia’s very healthy trade surplus so far, the

country’s current account balance will remain in surplus for 2019

Although, we expect Malaysia’s business condition to remain tough

in the near term as Nikkei PMI decrease in May at 48.8.

The continue project of ECRL, along with the Penang LRT and the
Pan Island Link projects would provide stimulus to growth.
Furthermore, Brent crude oil had posted its best performance since
early January this year from $51.4 to $71 per barrel. This will boost
the country’s income.

Those factors will drive our growth in the second half of the year.
Sound macroeconomic fundamentals

1) First, the economy is well-diversified in terms of sources of growth,

as well as exports products and markets (which means Malaysia is
not reliant on one source, product or market for growth.

2) Labour market conditions remain favourable, underpinned by

continued wage and employment growth (which implies continued
private consumption growth)

3) Malaysia remains an attractive destination for FDI, while the

current account continues to register a surplus, which will likely to
put country in a less vulnerable position to capital outflow. The
current account is expected to be in surplus, supported by a sizeable
goods surplus which would offset the deficit in the services and
income account.

4) Malaysia’s deep financial markets, resilient banking system and

strong financial buffers would ensure orderly and efficient financial
intermediation in the face of financial market headwinds. Deep
financial market that enables the country to absorb intermediate
capital flows.
Given these sound fundamentals, Malaysia is well-positioned to adjust
to the deeper structural reforms being undertaken by the Government.

We expect Bank Negara to maintain its policy rate at 3.25% due to:
I)Lack of inflationary pressure
II) Increasing probability for the US Fed to maintain its policy rate,
translating into a potential stronger ringgit vis-à-vis USD.

It said Malaysia’s bond yields, meanwhile, would be supported by healthy macro fundamentals
like steady growth, healthy reserves, a current account surplus, low inflation and real money
flows.
Read more at https://www.thestar.com.my/business/business-news/2019/04/19/economy-seen-
to-recover-in-h2-after-slow-first-quarter/#YVxJQxeyf53vatr5.99