THE International Monetary Fund (IMF) has upgraded its gross domestic product (GDP) growth forecast for Malaysia this year to 4.8 per cent from 4.5 per cent previously in its April 2017 World Economic Outlook (WEO).
IMF economic counsellor and director of research department Dr Maurice Obstfeld said this was mainly because of the government’s “very steady” hand in manoeuvring its monetary policy.
“We have upgraded Malaysia’s growth outlook for this year as we have seen successful efforts to maintain its sustainability from (going down) the downward path and a very, very steady hand in monetary policy,” he said at a media conference at the release of IMF’s July 2017 WEO update, here, yesterday.
Obstfeld also said Malaysia’s economic outlook next year had been reviewed to the upside with GDP veering closer to the five per cent mark.
Looking at growth from a larger perspective, he said the IMF viewed emerging and developing economies favourably in its July 2017 WEO update.
“Emerging and developing economies are projected to see a sustained pick-up in activity, with growth rising from 4.3 per cent last year to 4.6 per cent this year and 4.8 per cent next year.
“These forecasts reflect upward revisions, relative to April, of 0.2 percentage point for last year and 0.1 point for this year,” the latest WEO update noted.
Later Obstfeld said the indicators for the first part of this year had been stronger than expected.
“We see growth momentum going forward, including going into next year,” he added.
Meanwhile, the Statistics Department said the country’s economy was poised to expand in the second half based on the positive leading index (LI) and coincident index (CI) for May.
The LI, which monitors the economic performance in advance, increased 1.2 per cent in May to 118.6 points, from 117.2 points in April.
Six of the seven LI components recorded positive growth led by real imports of other basic precious and other non-ferrous metal (0.6 per cent), and number of new companies registered (0.2 per cent).
The CI, which measures the current economic activity, rose 0.9 per cent in May.
The main components that contributed to the increase were real salaries and wages in manufacturing sector (0.3 per cent), total employment in manufacturing sector (0.2 per cent) and real contributions to the Employees Provident Fund (0.2 per cent).