KUALA LUMPUR (Jan 3): AmBank Research said it foresees the economic growth prospects for Malaysia to remain weak.

In a note today, AmBank group chief economist and head of research Dr. Anthony Dass said 4Q2018 gross domestic product (GDP) should ease to around 4.0% to bring the full-year growth to 4.6%.

“With our base case GDP outlook for 2019 at 4.5% with the upside at 4.8%, we foresee further weakening pressure on growth in 1Q2019.

“We believe the economy should start to register slight improvement in the 2Q2019 and pick up thereafter, partly benefitting from the low base besides support coming from domestic activities, foreign direct investments and complemented by exports as the electronics cycle slows down, added with softer commodity prices,” he said.

Dass, who is also adjunct professor in economics at University of New England, Sydney, Australia, said the manufacturing sector, based on the Nikkei Malaysia Manufacturing Purchasing Managers' Index or PMI, observed a deep decline in business conditions in December.

He said the headline PMI fell to a six-month low to 46.8 in December from 48.2 in November.

Dass said the demarcation between expansion and contraction is 50.

“The data points to the sharpest deterioration in the health of the goods-producing sector since May.

“Besides, we noticed forward-looking gauges also indicate downside risks with overall demand to be weak, thus causing companies to become less willing to hold stocks,” he said.