KUALA LUMPUR — Jan. 15, 2019: The World Bank considers Malaysia’s economic fundamentals as strong due to its diversified economy, despite a recent downgrade by Nomura Global Markets Research on the Malaysian equities market.
World Bank Group’s (Macroeconomics, Trade and Investment) lead economist Richard Record said Malaysia’s diversified income stream such as electrical and electronic manufacturing, commodities, natural resources, agriculture, as well as external and domestic demand would give strength to Malaysia.
But in the medium-term, there are challenges around human capital, productivity and governance.
“However, we have seen a lot of movement in the 11th Malaysia Plan mid-term review for 2019-2020 whereby the government is setting out new plans to tackle those issues over the next few years,” he said on the sidelines of the the bank’s conference on Globalisation: Contents and Discontents here today.
Record said Malaysia’s economic growth continues to be stable and the World Bank has projected it to grow at 4.7 per cent for this year.
Khazanah Research Institute visiting research fellow Dr. Jomo Kwame Sundaram said whether a country is doing well, especially an open economy like Malaysia, is subject to many things.
“Rating agencies are notoriously useless. I do not believe in rating agencies but a lot of people do, or else they would be out of business,” he remarked.
Jomo was one of the chairpersons for a session at the conference.
On January 9, Nomura Global Markets Research downgraded the Malaysian equities market to underweight from neutral on poor earnings growth prospects and higher fiscal deficit of 3.9 per cent for 2018.
In response, Finance Minister Lim Guan Eng issued a statement to say that the government was confident of achieving 3.7 per cent and 3.4 per cent of fiscal deficit in 2018 and 2019 respectively. — Bernama