KUALA LUMPUR — Dec. 18, 2018: The World Bank has again revised downwards by 0.2 per cent its projection of Malaysia’s Gross Domestic Product (GDP) to 4.7 per cent this year after taking into consideration the government’s spending and investment plan as well as external factors.
Earlier in October, the bank had revised the projection to 4.9 per cent from 5.4 per cent.
Country economist Shakira Teh Sharifuddin said government spending and investment under the 2019 Budget were lower due to rigorous rationalisation plan as well as overall investment activities, which picked up post-14th general elections.
These two major developments were taken into account in the projection, she said, adding that the country’s investment had slowed down in the first half of 2018 prior to the elections on May 9.
She also explained that external factors, including a potential recession in the United States next year, may have a spill-over effect on Malaysia’s economy.
“We already priced in the possibility of a recession in the US, and that also has translated into the growth forecast for Malaysia,” she said at a press conference at Bank Negara today.
Commenting on Malaysia’s export performance, which was slated to face headwinds due to heightened trade tensions, Shakira said based on World Bank data, Malaysia is likely to see a small positive impact.
Malaysia’s share of direct import to the US is at 7.5 per cent and it is not subjected to tariff, while Malaysia’s indirect export is at 2.5 per cent, she said, adding that there is an indication that Malaysia stands to gain some share at China’s expense. — Bernama