Malaysia’s Economy To Remain On Expansionary Path -- MIDF Research

KUALA LUMPUR, May 2 (Bernama) -- Malaysia’s economy is expected to remain on an expansionary path and continue growing from June to August, albeit at a moderate pace backed by better global outlook and strong fundamentals. In its monthly economic review released Thursday, MIDF Research said it foresees a slight recovery towards the second quarter of 2019 and the second half of the year amid a gradual pick-up in commodity prices, strong domestic demand and receding fear of trade war. “Global demand is expected to recover as the US and China is expected to strike a trade deal in early May,” it said. On the local front, MIDF research said the consumer price index (CPI) increased 0.2 per cent year-on-year (y-o-y) in March 2019 as forecast, rebounding from the deflation in the previous two months. “The recovery was mainly driven by an improvement in the transport component besides continuous increase in food and non-alcoholic beverages,” it said. Looking ahead, MIDF Research said Malaysia’s consumer inflation is likely to stay low following the lower capped prices of RON95 and diesel fuels at RM2.08 and RM2.18 per litre, respectively. “Nevertheless, demand-push factor remains firm amid a stable job market and steady wage growth,” it said. As for the labour market, the research house said growth has been maintained at 2.1 per cent y-o-y in February 2019, which indicated strong market demand and continued to outpace unemployment growth for the last 24 months since March 2017. “The stable job market reflects the healthy development of Malaysia’s economy and provides solid support to domestic demand,” it said. MIDF said domestic spending remained strong as distributive trade increased 6.5 per cent y-o-y in February 2019, despite moderating from 7.8 per cent y-o-y in the previous month as all components grew at a softer pace. “Retail sales growth eased to a single digit of 8.5 per cent y-o-y in February 2019 after eight continuous months of growth at double digit. Similarly, wholesale and motor vehicle sales growth eased to 5.8 per cent y-o-y and 2.4 per cent y-o-y, respectively,” it said. MIDF Research added that it was optimistic to see continuous solid domestic demand in 2019, underpinned by a stable job market, wage growth, low inflationary pressure and steady economic growth. -- BERNAMA