GEORGE TOWN (Feb 1): Finance Minister Lim Guan Eng expects the country's inflation rate to average between 1.6 per cent and 2.0 per cent this year due to global uncertainties caused by the trade war between the United States and China.

"We are projecting the inflation rate to be around 1.6 per cent for 2019...if the US-China trade escalates then it could go up to 2.0 per cent, but, we are still finalising the final figure," he told a press conference here today.

However, he said the 2.0 per cent inflation rate was still considered very low compared with 2017 and the country's inflation rate for 2019 would depend on the global scenario.

"If Donald Trump (US President) suddenly settles the trade war with China, then you will see the stock market and everything ‘flying’ (bouncing back), but if trade war escalates then it would be a different story," he said.

Lim, the Member of Parliament for Bagan, said domestically, things would get better in tandem with the current trend.

In 2018, Malaysia recorded an inflation rate of only one per cent, the lowest in nine years, compared with an inflation rate of 3.7 per cent posted in 2017.

"If you tell (this) last year, that we would be able to achieve an inflation rate of one per cent, I would not trust you but we managed to keep it low due to the abolishment of the Goods and Services Tax," he said, adding that the country also recorded total exports of close to RM1 trillion in 2018.