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Jonathan Koh, economist at Standard Chartered, estimate Malaysia’s Q4 2018 GDP growth of 4.4% y/y, which is similar to Q3.

Key Quotes

“Private consumption may have eased from the 9% y/y growth in Q3 as the boost from the ‘tax holiday’ in June-August 2018 likely faded. Nevertheless, a rebound in mining and agriculture activity may have supported growth.”

“As a result, 2018 GDP growth may come in at 4.6% y/y, lower than 5.9% in 2017. Private consumption was the main growth driver in 2018, accounting for 92% of GDP growth in 9M-2018 versus 64% in 9M-2017, benefiting from the ‘tax-holiday’ boost and strong labour market conditions.”

“We forecast 4.9% GDP growth in 2019. Private consumption is likely to remain the main growth pillar.”

“We maintain our call for Bank Negara Malaysia to keep rates on hold in 2019, with risks skewed towards a cut, especially if external demand worsens further and affects domestic activity.”