KUALA LUMPUR — Aug. 17, 2018: Bank Negara Malaysia (BNM) has revised downwards the country’s full-year gross domestic product (GDP) growth for 2018 to five per cent from the 5.5-6.0 per cent projected earlier due to prolonged disruptions in oil and gas production and low production in agriculture.
The growth will however be supported by strong business and consumer sentiments, strong consumer spending due to the tax holiday from June to August and the expansion in manufacturing production capacity.
With the five per cent growth projection, the central bank’s governor Datuk Nor Shamsiah Mohd. Yunus said at a press conference that Malaysia would continue to be one of the fastest growing economies in the region.
Going forward in 2019, growth momentum will remain steady, supported by sustained global growth and trade, recovery of commodity output and favourable labour market conditions.
Nor Shamsiah expects the impact on inflation of the Sales and Services Tax (SST) to be reintroduced on September 1 to be much smaller compared to the Goods and Services Tax (GST).
This is because 52 per cent of the items in the Consumer Price Index basket were subjected to the GST but the previous SST regime will only apply to 28 per cent of the items.
“However, it will still depend on the behaviour of traders in terms of their pricing strategy and how they might pass cost to consumers,” she said. — Bernama