Bank Negara cuts 2018 GDP growth forecast to 5%

KUALA LUMPUR: Bank Negara Malaysia (BNM) today cut its forecast for gross domestic product (GDP) growth this year to 5% from 5.5% to 6% previously.
The central bank’s governor Datuk Nor Shamsiah Mohd Yunus said this was given the slower growth of 4.5% recorded in the second quarter of the year, which was affected by commodity-specific shocks in the mining as well as agriculture sectors that led to supply disruptions.
However, Shamsiah said that Malaysia’s macroeconomic fundamentals remain strong, and thus provides the country with the requisite buffers to effectively manage potential shocks to the economy.
Going forward, she said the Malaysian economy is expected to remain on a steady growth path supported mainly by private sector activity.
In the second quarter, the headline inflation declined to 1.3% compared with 1.8% in the previous quarter mainly reflecting the zerorisation of the Goods and Services Tax (GST) rate.
Shamsiah said the headline inflation is projected to moderate moving forward, noting the extent of the moderation would depend on the pass-through from changes in the consumption tax policy.