KUALA LUMPUR — Feb. 9, 2018: Singapore-based banking group OCBC Bank has forecast Malaysia’s gross domestic product (GDP) to grow five per cent this year, backed by strong private consumption and investments.
According to the head of treasury research and strategy (Global Treasury) Selena Ling, private consumption is expected to remain strong due to continued government income support, reduced income tax and improving sentiments.
“Private investments, on the other hand, will be strong due to improving external demand and sentiments,” she told reporters at a briefing on the country’s 2018 outlook here today.
Fiscal deficit is forecast to decline to 2.9 per cent this year compared to three per cent last year, on the back of stable oil price and encouraging economic growth.
Ling expects the oil price to hover around US$65-US$70 (US$1=RM3.94) per barrel, while the ringgit is projected to strengthen to RM3.76 against the US dollar by year-end due to further relative central bank dynamics.
The local unit is also not expected to receive any major impact from interest rate hike in the United States, as the market had already factored in three interest rate increases in their projections.
On the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which is expected to be signed by March, she said it would provide better access to Malaysian businesses.
In this respect, the CPTPP should benefit Malaysian companies in terms of lowered trade barriers, better access to business service providers and smoother access to foreign government contracts.
The Regional Comprehensive Economic Partnership, to be signed in November, will also provide access to a huge potential market since the trade pact comprised 16 economies with 3.4 billion people and accounted for 39 per cent of the global GDP as of 2017. — Bernama