KUALA LUMPUR (Aug 6): Ambank Group Research is projecting Malaysia’s growth domestic product (GDP) in 2019 to come in at 5%.

In a note today, AmBank group chief economist and head of research Dr Anthony Dass said trade surplus in June fell RM3.9 billion to RM6.0 billion mainly due to a surge in imports (14.9% year-on-year (y/y) compared to the 7.6% y/y gain in exports).

However, he said with both imports and exports having grown faster in 2Q2018 by 8.1% and 8.3% respectively compared to 1Q2018, added with improving manufacturing outlook based on PMI data, he expects the 2Q2018 GDP to grow around 5.6%-5.8% compared to 5.4% in 1Q2018.

“Looking ahead in 2018, we noticed some optimism outlined by manufacturers though new orders remained weak partly due to the weaker ringgit. With higher output, firms increased their payrolls.

“Added with moderate inflation plus the holiday tax, these will bode well for private consumption and business activities, apart from the pickup in investment activities,” he said.

Dass however said domestic policy uncertainty remained an issue.

“Still, we believe the economy should be able to register a growth of around 5.5% in 2018 with the lower end at 5.3%.

“We feel the challenge will be in 2019, underpinned by global issues such as trade war, currency war, debt crisis and global monetary tightening while on the local front, it will be policy certainties.

“Thus, we project 2019 GDP at 5.0%,” he said.