KUALA LUMPUR — January 7, 2016: The World Bank has forecast that Malaysia’s economic growth will slow to 4.5 per cent this year from 4.7 per cent in 2015 on slowing domestic demand but benefit from lesser reliance on commodity-related revenue.
Its January 2016 Global Economic Prospects report describes Malaysia’s growth as almost similar to the projection for developing economies, which are expected to expand by 4.8 per cent this year from 4.3 per cent previously.
Global growth is expected to pick up modestly to 2.9 per cent from 2.4 per cent last year, driven by stronger growth in advanced economies.
“Firmer growth ahead will depend on continued momentum in high income countries, the stabilisation of commodity prices, and China’s gradual transition towards a more consumption and services-based growth model,” the World Bank said.
It said that global economic growth was less than expected last year after falling commodity prices, flagging trade, capital flows and episodes of
financial volatility sapped economic activity.
On East Asia and the Pacific, the World Bank forecasts the region’s economic growth to slow to 6.3 per cent this year from 6.4 per cent in 2015,
weighed on by slower growth in China.
Growth in China is forecast to ease further to 6.7 per cent this year from 6.9 per cent previously.
The report said slowing growth in the world’s second largest economy is expected to offset a modest pick-up in growth among members of Asean this year.
However, the region is expected to benefit from the strengthening recovery in advanced economies, low energy prices, improved political stability,
and continued favorable conditions in global financial markets, despite anticipated monetary policy tightening in the United States.
Deepening regional trade and investment would boost economic activity and create jobs.
“The Trans-Pacific Partnership trade accord, if implemented, would lift trade and growth in the region.”
It said growth in East Asia and the Pacific slowed to an estimated 6.4 per cent in 2015 from 6.8 per cent previously because of continued growth deceleration in China and in commodity exporters, including Indonesia and Malaysia.
The slowdown, however, was offset by the strong performance by commodity importers, especially Vietnam and the Philippines, and a moderate recovery in Thailand. — Bernama