Friday 29 Mar 2024
By
main news image

KUALA LUMPUR (July 20): The Asian Development Bank (ADB) has upgraded its growth outlook for Malaysia for 2017 to 4.7% from 4.4% in a supplement to its Asian Development Outlook 2017 released today.

ADB said Malaysia’s economy beat expectations in the first quarter of 2017 as it grew by 5.6%, the highest rate in 2 years, supported by sharp expansion in domestic demand.

It said fixed investment led the way, growing by double digits as it was propelled by larger investments in services and manufacturing, as well as by increased government investment.

ADB said private consumption surged, fueled by higher wages, strong hiring, and government subsidies to low income households.

The report said exports also recovered, but, as imports rose faster on increased demand for capital and intermediate goods, net exports dragged on growth.

Looking ahead, the report said the expansion in government infrastructure spending and private capital spending will continue in 2018, albeit at a slightly slower pace than in 2017.

ADB said household spending is projected to remain healthy but will face downward pressure from elevated inflation and rising servicing costs for household debt.

The report said growth in exports is expected to remain firm, supported by a weaker currency and improvements in global trade.

Meanwhile, ADB has also upgraded its outlook for Asia from 5.7% to 5.9% in 2017 and from 5.7% to 5.8% for 2018.

The bank said economic growth prospects in developing Asia for 2017 have improved on the back of stronger-than-expected export demand in the first quarter of this year.

It said the smaller uptick in the 2018 rate reflects a cautious view on the sustainability of this export push.

ADB chief economist Yasuyuki Sawada said developing Asia is off to a good start this year with improved exports pushing growth prospects for the rest of 2017.

“Despite lingering uncertainties surrounding the strength of the global recovery, we feel that the region’s economies are well-placed to face potential shocks to the outlook,” he said.

ADB said combined growth for the major industrial economies is forecast to remain at 1.9% in 2017 and 2018.

      Print
      Text Size
      Share