Malaysia's Economy Gets Support From Robust Domestic Demand, Investments - UOB

KUALA LUMPUR, Nov 22 (Bernama) -- Malaysia’s economy will be able to find support from robust domestic private consumption and investments amid concerns over the intensifying US-China trade dispute and moderating global growth, with the economy set to grow 4.8 per cent next year. United Overseas Bank (Malaysia) Bhd (UOB Malaysia) Senior Economist Julia Goh said the impact of the trade tensions would be felt more materially in 2019. She said the 2019 Budget would deliver positive fiscal measures to reinforce consumer spending, while repayment of tax refunds would help improve cash flows for the private sector and domestic spending. "It is supportive for the ringgit and the economy. The 4.8 per cent growth estimate is considered stable amid moderation in the region. For 2018, we also expecting similar 4.8 per cent growth,” she said at the bank’s 2019 Economic Outlook seminar here Thursday. Over the long term, Goh said Malaysia's economy stands to benefit from the government's efforts to strengthen investors’ confident over time. She said the country’s electrical and electronic sector would be among sectors that would benefit from US-China trade war, with many local companies already receiving enquiries from those who planned to relocate here. Both export and import are expected to grow between four to five per cent, respectively. "For net trade in 2019, we see a negative overall growth but this will be cushioned by supportive domestic demand. "There are also a lot of efforts to diversify and expand our export base. All these will help sustain current surplus and exports growth," she said. In the past, there were concerns over account deficit raised in a few quarters following the country's high import content, she said, adding that the recent deferment and cancellation of mega projects would likely reduce import numbers. On headline inflation, she expects it to be at 1.2 per cent this year and two per cent next year. Goh also expects Bank Negara Malaysia to keep the overnight policy rate at 3.25 per cent in the first half of 2019. -- BERNAMA