KUALA LUMPUR: The Malaysian Chinese business community is generally more pessimistic about the local economic outlook for 2015 and 2016, but is looking towards an improvement in 2017, a survey by the Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM) found.

According to the ACCCIM survey report on the economic situation of Malaysia for the second half of 2014, a primary factor that resulted in this finding was higher cost — 70% of respondents complained that they had experienced a significant increase in cost.

Moreover, respondents were also wary that the ongoing low commodities prices are affecting the nation’s export earnings.

The deputy chairman of the commerce association’s socio-economic research committee and RHB Research economist Peck Boon Soon conceded that the current economic circumstances are not favourable to Malaysia.

“Nevertheless, these headwinds, such as the low oil prices, GST (goods and services tax), and lacklustre property market, are temporary,” he told reporters after presenting the findings of the survey yesterday.

Peck is of the view that after the market digests these new economic conditions, it will eventually normalise.

“I believe that is also the reason respondents felt that there would be an improvement in 2017. Probably by 2016 we will be able to see some normalisation already,” he said.  

Peck also opined that the GST is the main reason for the business community to worry.

“Definitely, there will be some additional cost added to them, despite the government expecting an inflation rate of 2% to 3% for 2015; we are expecting 3.3% to 3.5%,” he said.

This article first appeared in The Edge Financial Daily, on March 31, 2015.