KUALA LUMPUR: Malaysia’s economy is expected to grow as much as 5.8 per cent in the second quarter of the year, from 5.4 per cent in the first three months, economists said.
Checks by NSTP Business with several economists pointed to an expected growth range of 5.2 per cent to 5.8 per cent, tipping more towards the high side.
Bank Negara Malaysia is expected to release the second quarter data on Friday.(August 17).
MIDF Research chief economist Dr Kamaruddin Mohd Nor expects a 5.8 per cent expansion, which would be driven largely by the domestic sector, solid labour market and better wage growth.
“We anticipate the growth will be coming from domestic sector, private consumption is expected to remain strong driven by solid labor market and positive wage growth while external sector is to remain resilience despite heighten trade tension,” he said when contacted.
AmBank Group chief economist Anthony Dass said Malaysia’s second quarter GDP would perform better as industrial production, manufacturing sales, exports, imports and loans approved are seeing better numbers.
“AmBank’s preliminary estimate suggests that the GDP for Q2 could expand between 5.5 per cent and 5.7 per cent compared to 5.4 per cent in the first quarter.
“For the full-year, GDP growth remain is expected to remain at 5.5 per cent with the lower end at 5.3 per cent,” he said.
Bank Islam Malaysia chief economist Dr Mohd Afzanizam Abdul Rashid forecast a lower estimate of 5.2 per cent for the second quarter.
This was said due to cautious government spending, stronger rebound of consumer sentiment index of 132,9, a 21-year high as well as high possibility that the economy would grow sub-five per cent in the second half of 2018.
“While businesses and government are likely to spend cautiously, consumers are expected to maintain a decent expenditure growth in view of the strong rebound in the Consumer Sentiment Index to 132.9 in the 2Q2018, a 21-year high,” Afzanizam said.
He said going forward, the effect of global trade war as well as uncertainty on the price effect following the implementation of Sales and Services Tax (SST) in September was expected to have important impact to growth momentum for external demand and domestic spending.
“There is strong likelihood that the economy would grow below five per cent growth in the 2H2018. Against such backdrop, we are projecting the 2018 second quarter GDP to grow at a rate of 5.2 per cent after recording 5.4 per cent growth in the preceding quarter,” he said in his research note on Saturday.
Socio-Economic Research Centre (SERC) is more or less echoed Affzanizam’s less bullish outlook in the coming months.
SERC reportedly forecast that Malaysia’s GDP to fall to below four per cent in 2019 if the United States and China continued to hike tariffs on a wider range of imports from each other.
The research centre cautioned that Malaysia’s economic performance could be “substantially affected” if the trade war worsens, as both the US and China were the country’s major export markets although it acknowledged that it was too early to gauge the real impact on the domestic economy.