Malaysia's GDP to grow 4.9% in 2019

PETALING JAYA: Malaysia’s economy is projected to register a 4.9% growth in 2019 after an estimated 4.8% expansion in 2018, on the back of sound domestic demand, steady global growth and trade, continuous expansion in electrical and electronics (E&E) as well as higher oil prices.
According to the Economic Outlook 2019 Report, private sector expenditure will remain as the key growth driver, cushioning the effects of lower public sector spending.
Private investment is anticipated to expand with capital outlays mainly channelled into the services and manufacturing sectors.
However, public expenditure growth is expected to moderate following the government’s initiatives to review and re-prioritise expenditure and lower capital spending by public corporations.
Domestic demand growth is projected to remain resilient at 5% and 4.8% in 2018 and 2019, respectively, underpinned by sustained private sector expenditure, which constitutes about 72% of GDP.
On the supply side, growth is expected to be driven by the services and manufacturing sectors. The services sector is projected to remain firm supported by consumption and domestic tourism activities as well as strong demand for ICT, transport and finance.
The manufacturing sector is set to record a steady growth in tandem with developments in the global semiconductor industry.
Although the growth in agriculture and mining sectors are expected to decline marginally in 2018, it is projected to rebound in 2019 in 2019 following an uptick in the production of crude palm oil and liquefied natural gas.
For the external sector, gross exports growth is projected to moderate to 3.9% in 2019 from 4.4% in 2018, supported by continuous demand for manufactured goods coupled with a rebound in commodity exports.
Gross imports are estimated to grow by 4.1% in 2019, underpinned by continued imports of intermediate goods and steady re-export activity.
The current account surplus is expected to range between 2.5% and 3% of gross national income (GNI) in 2018, largely attributed to higher goods surplus despite deficits in the services and income accounts.
The current account is expected to remain in surplus in 2019, albeit narrowing between 2% and 3% of GNI due to lower goods surplus and widening services and income deficits.
Despite the resilient economic performance, risk to growth is tilted downside emanating from heightening uncertainties in the global environment, including rising trade conflict, volatility in global financial markets and oil prices as well as geopolitical tensions.