KUALA LUMPUR — Nov. 17, 2017: Malaysia is expecting its gross domestic product (GDP) to grow by between 5.2 per cent and 5.7 per cent this year, mainly aided by the positive export sector and domestic demand.
“The numbers are looking good with the export sector showing double-digit growth and we really hope there will be a pleasant surprise this year,” said Bank Negara Malaysia (BNM) Governor Tan Sri Muhammad Ibrahim at a press conference following the release of the report Economic and Financial Developments in Malaysia in the Third Quarter of 2017.
Muhammad, however, cautioned that the country should be mindful of external performance, which would not only affect Malaysia but globally.
The third-quarter result shows that the GDP had grown at a faster pace of 6.2 per cent compared with 4.3 per cent in the same quarter last year, thanks to domestic demand, particularly private sector spending.
From the supply side, the improvement was seen across all sectors – services, manufacturing, mining, agriculture and construction.
On the external front, BNM expects exports to continue to benefit from favourable global demands while inflation is expected to average at the upper end of the forecast range of 3-4 per cent for 2017.
“For this year, we expect the inflation to still be within 3-4 per cent, depending on how global oil price is faring,” said Muhammad, adding that inflation moderated to 3.8 per cent due mainly to lower transport inflation.
On the continued pressure from the higher cost of living faced by the people, Muhammad said the central bank noted that economic growth was not felt by the people, especially the lower income group.
“Our concern is more on totality, which includes creating better economic policy that creates better paying jobs in the industry,” he said.
As for foreign direct investments, Malaysia needs to look at initiatives that could be undertaken to help generate more income for the country and also be more competitive while adding value to certain sectors.
In the third quarter of 2017, the financial account registered a net outflow of RM1.2 billion as higher inflows of long-term FDI and sustained foreign inflows into domestic portfolio assets were offset by portfolio investments abroad by residents and outflows arising from banks’ liquidity and treasury management operations.
The direct investment account turned around to register a net inflow of RM6.2 billion (Q2 2017: net outflow of RM7.1 billion), as FDI inflows more than offset outflows of direct investments abroad during the quarter.
FDI increased to RM11.2 billion due mainly to higher injections of equity capital and reinvestment of earnings from parent companies.
The inflows were channelled into the real estate activities sub-sector, followed by mining and manufacturing sectors.
In Putrajaya, Prime Minister and Finance Minister Datuk Seri Najib Razak said the achievement made Malaysia one of the countries with the highest economic growth in the world this year.
He also described this as being in line with the demand of Islam, which always sets the best and highest targets in all matters.
“As Muslims, we have to set the level of excellence that we have to achieve, thus making sure we have targets for whatever we do, such as the best, the highest, both of which mean excellence,” said Najib when opening the Mahmoodiah Surau in Precinct 18 here today.
Najib joined local residents at Friday prayers at the surau that can accommodate 1,200 worshippers. He was impressed with the beauty of the surau’s design and described it as one of the most comfortable and beautiful he had visited.
The surau, the construction of which began in April 2015, is located next to Sekolah Rendah Agama Mahmoodiah. — Bernama