By Tengku Noor Shamsiah Tengku Abdullah
KUALA LUMPUR, Nov 12 -- Malaysia will continue to be on the global investors’ radar due to its solid economic position and its importance in the Belt and Road Initiative (BRI), said IQI Global chief economist Shan Saeed.
There have been lots of financial fragilities in Europe and many advanced economies in recent times, he said.
"However, ASEAN and Malaysia are still maintaining economic growth due to their political maturity. Economic decision-makers and managers have policy levers to spur growth and achieve a high level of growth trajectory in a structured way,” he told Bernama in an interview here today.
He said this when asked to comment on Moody's decision to cut its global sovereign rating outlook for 2020 to “negative” from “stable” yesterday. The rating agency said countries embedded in global supply chains like Malaysia and Singapore faced a slowdown in their economies.
IQI Global is a leading property and investment company operating and advising clients in Kuala Lumpur, Singapore, Hong Kong, London, Melbourne, Bangkok, Makati, Toronto and Dubai.
Shan, who has more than 18 years of financial market experience in the areas of private banking, risk /compliance management, commodity investments, global economy, brand and business strategy, said: "As we navigate through tough times in the next two to three years, a few variables have become significant in macro-economic calculus, namely economic confidence, political stability, aggregate demand, productive labour force and demographics."
He said it has been observed since 2015 that economic growth has a direct correlation with demographics.
"Malaysia has a strong, vibrant, young tech-savvy population with a burning desire to succeed which has become the hallmark for many growing economies,” he said.
He said Malaysia has also positioned itself strategically in the global trade market with a strong focus on foreign direct investment (FDI) and improving trade relations across the globe.
Shan noted the trade spat between China and the US has also provided new opportunities with global investors relocating their operations to Malaysia due to the country's productive labour force and strategic location.
"At IQI Global, we stand buoyant on the economic growth in 2019 with a gross domestic product growth outlook of 4.5 per cent to 5 per cent and a stable ringgit at 3.95 to 4.40 against the US dollar,” he said.
He said Malaysia is an important player in the BRI, falling under the southern corridor of BRI, as 80 per cent of China’s trade moves from the west to the east through the Straits of Malacca.
Shan pointed that FDI remains strong due to the political stability in the country.
According to the Department of Statistics, Malaysia’s total stock of foreign direct investment rose 10.3 per cent to RM667.5 billion in the second quarter (Q2) of this year from RM605.1 billion a year ago.
"This is quite impressive in the current times, taking into account the way Europe and the UK are going down due to political bickering at the top. Brexit has been among the serious shenanigans in the modern epoch.
"Debt-to-GDP ratio is well below the threshold level. The government has been able to bring down the debt amount in the last 17 months, which goes down very well with investors at the macro level,” he said.
Shan noted that Malaysia’s debt-to-GDP ratio stood at 51.8 per cent in 2018.
He said in his view, Malaysia will continue to deliver strong economic outcomes due to its significance in BRI equation and strategic geographical position.
"IQI is a global player and does not follow rating agencies’ insights since they are not germane to the market. Global investors prefer to park funds in a country with political stability, strong balance sheet, productive labour force and disciplined fiscal side, and above all, one that maintains economic confidence at the macro level. Malaysia is an important part of the global trade game,” Shan added.