Thursday 28 Mar 2024
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KUALA LUMPUR (Oct 21): IHS Global Insight forecasts the country’s real gross domestic product (GDP) to improve from around 4% in 2017 to 5% in 2018, and 5.2% in 2019.

Its Asia-Pacific chief economist, Rajiv Biswas, said over the next decade, Malaysia’s GDP is forecast to grow at an average annual rate of 5.0% per year.

He said the manufacturing sector will be an important growth engine for the Malaysian economy, over the medium to long term.

“Real manufacturing sales are forecast to grow at an average annual rate of 4.9% over 2016-2025, with leading growth sectors being communications equipment (+6.9% per year), medical equipment (+5.7% per year), and electrical machinery (+5.6% per year),” he said.

Biswas said this in a statement today, following the tabling of Budget 2017, which he described as a fiscally conservative budget.

The budget, he said, aims to reduce Malaysia’s fiscal deficit from 3.1% in the 2016 fiscal year to 3.0% in 2017.

“The government debt to GDP ratio has been reduced to 53.2% of GDP, highlighting the government’s commitment to maintaining fiscal prudence,” he added.

Biswas said Malaysia’s export growth is also forecast to pick up from 1.1% in 2016 to 2.7% in 2017, boosted by stronger exports of electrical and electronic exports, as well as improving commodities exports.

With Budget 2017 Budget maintaining fiscal discipline, the overall fiscal outlook is expected to be gradually improving over the medium term, helped by improving oil and gas prices.

“IHS Global Insight forecasts that Brent crude oil prices will rise from an average of US$43 in 2016 to US$52 in 2017, which will underpin a gradual improvement in Malaysian fiscal revenues from oil and gas.

“The fiscal outlook for Malaysia is forecast to improve further in 2018, as average Brent crude oil prices rise to US$57 for calendar year 2018,” he said, adding that this will overall support a gradual improvement in the macroeconomic outlook for Malaysia.

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