Friday 29 Mar 2024
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KUALA LUMPUR (April 12): The World Bank said Malaysia's economy, as measured by gross domestic product (GDP), is forecasted grow 5.4% in 2018 from a year earlier, supported by continued strength in private consumption.

World Bank said today in its East Asia and Pacific Economic Update that with the anticipated decline in Malaysia public investment, gross fixed capital formation will be driven mainly by expansion in private sector capital expenditure.

World Bank said the country's private sector capital expenditure "is expected to be sustained by the continued flows of infrastructure projects and capital investments in the manufacturing and services sectors. The strength of Malaysia's export performance is expected to continue into 1H2018 in tandem with the ongoing cyclical upturn in global trade, although at a lower rate than the preceding year".

"Looking further ahead, Malaysia's economy is projected to expand at 5.1% in 2019 and 4.8% in 2020 and is expected to achieve high-income country status at some point between 2020 and 2024," World Bank said.

According to World Bank, Malaysia's economic growth is expected to remain strong in the near term, albeit at a more moderate pace compared to 2017 when GDP expanded 5.9%. World Bank said downside risks to the nation's growth prospects relate mainly to the external environment.

World Bank said an abrupt adjustment to global financial market conditions, or weaker-than-expected growth in major economies and export demand could have a negative impact on Malaysia. This is due to Malaysia's high level of integration with the global economy and financial markets, according to World Bank.

"Domestically, downside risks relate primarily to the relatively high level of household and public-sector debt, as well as uncertainties surrounding Malaysia's forthcoming general election. Meanwhile, the government remains committed to fiscal consolidation amid a continued expectation of the fiscal deficit target of 2.8% of GDP being achieved in 2018." World Bank said.

 

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