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After jump in Q2 GDP, Malaysia's economy seen growing as high as 7 pct this year

12/08/2022 04:55 PM

KUALA LUMPUR, Aug 12 (Bernama) -- The 8.9 per cent jump in gross domestic product (GDP) growth recorded in the second quarter (Q2) is a reflection of the strength of Malaysia’s macroeconomics, and the country may even hit GDP growth as high as 6.5 to 7.0 per cent this year, said Shan Saeed, the chief economist at Juwai IQI.

The Q2 growth also reflected strong domestic demand in the country and the government’s efforts in ensuring the economy grows robustly, he added.

Earlier this year, Shan had projected the Malaysian GDP to expand between 4.0 and 5.0 per cent for this year and above 5.0 per cent in Q2.

“It has (Q2 growth) beaten market expectations and it has surprised the market.

“Based on the premise that consumption patterns will remain strong, i.e. domestic demand and investment continue to go up, as well as the value of trade and commerce numbers increases, at Juwai IQI we believe Malaysia’s economy will record solid growth in 2022,’’ he told Bernama.

Shan also noted that the real estate sector in the region has continued to be steady.

“People are still buying property despite volatility in the global market and more importantly the Malaysian government has maintained a policy framework that gives confidence to both local and international investors,’’ he added. 

Meanwhile, Bank Negara Malaysia (BNM) has maintained its GDP growth forecast of 5.3 to 6.3 per cent for this year, with growth seen at the upper level of the forecast, according to governor Tan Sri Nor Shamsiah Mohd Yunus at the announcement of Malaysia’s Q2 economic growth here today.

With the robust growth of 6.9 per cent recorded in the first half 2022, the economy is projected to expand further for the remainder of the year. 

Nor Shamsiah said that while external demand could face headwinds from slower global growth, the Malaysian economy will continue to be supported by firm domestic demand moving forward. 

During Q2, headline and core inflation increased to 2.8 and 2.5 per cent, respectively, compared to 2.2 and 1.7 per cent recorded in Q1, reflecting an improvement in demand conditions amid the high-cost environment, with price increases mainly driven by food prices.

She said the economy has been absorbing the impact of the overnight policy rate (OPR) hike quite well.

Malaysia has raised the OPR twice this year from its historical low of 1.75 per cent to 2.25 per cent in a bid to tame inflation. 


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