KUALA LUMPUR: Malay-sia’s current focus on free market, quality investment and high productivity is expected to have significant impacts on economic growth this year despite temporary chaos during the transition period which deteriorated investors’ confidence, said MIDF Research.
It said the resumption of infrastructure projects such as the East Coast Rail Link (ECRL) would restore investors’ confidence and trust in the Malaysian market, translating into investment flows.
“We opine the second half this year will see a significant rebound in investment activities and continuous upward trajectory for domestic consumption underpin by lower overnight policy rate (OPR) effects, low inflationary pressure and stable job market,” it said in a research note yesterday.
It also expected a positive prospect for domestic demand with private consumption and private investment to continue expanding at 7.2 and 4.2 per cent year-on-year (y-o-y), respectively in 2019, while government expenditure was forecast to increase at a faster rate of 3.5 per cent y-o-y.
On the trade front, MIDF said external trade performance was expected to further moderate as the US and China failed to secure a deal to date and started imposing tariff hikes on each other, disrupting the supply chain and likely to lessen import demand from Malaysia.
“Net exports increased strongly by 10.9 per cent y-o-y and 14.7 per cent quarter-on-quarter. However, exports grew marginally while imports contracted after three consecutive quarters of positive growth amid global trade uncertainties mainly due to trade wars. – Bernama
