A Resurgent Malaysia, A Dynamic
Economy, A Prosperous Society
Dominic Shum, 3 Nov 2018
The economic outlook for Malaysia remains hazardous as mentioned by YB Finance Minister Mr. Lim Guan Eng in his maiden Budget Speech. YB Lim informed that the hostile global economy poses various challenges to Malaysia but nevertheless he expected Malaysia’s GDP to grow at at respectable pace of 4.9%. This is inline with the global economy but Malaysia must continue to exercise fiscal prudence, improve factor productivity and maintain a conducive monetary policy in order to sustain current levels of growth. The business community is also looking towards the disengagement of the government on non strategic industries to drive the private sector growth and reduce the federal deficit.
Global economy to grow at 3.7% in 2019 with the the US and other developed countries growing at a reasonably crisp pace. The projected growth is expected to remain for the next two years but is subject to many downside risks.
The World Bank noted that global growth has eased but remains robust, although with downside risks. The possibility of financial market stress, escalating trade protectionism and heightened geopolitical tensions continue to cloud the outlook (World Bank 2018). However, it must be noted that while protectionism and America First rhetoric are popular now, Trump might turn the volume down after the mid term elections and take on a more conciliatory path. Oil prices will also stabilize at levels somewhat lower than current levels as the market will sort itself out after the logistics and roadblocks are smoothed out. Higher level of consumer debts and the situation in Europe post BREXIT may dampen the mood a bit but the global economy which is underpinned by developing and emerging markets and edged up by developed markets will continue to grow significantly although downside risks remains. DS
Dominic Shum is the principal consultant and trainer of DRC Services, an EXCO member of the Malaysian Economic Association and council member of a few professional societies. He holds a BBA from the National University of Singapore and an MBA from the Australian Institute of Business.
Source: World Bank, Global Economic Prospects JUNE 2018 The Turning of the Tide? file:///D:/MY%20RESEARCH/ECONOMICS/Budget%202019/WOrldbank%20report%202018.pdf