KUALA LUMPUR (Jan 9): Malaysia's GDP growth is expected to see some moderation in 2015 from falling oil prices, according to an economist at IHS, an international research company.

Rajiv Biswas, chief Asia-Pacific economist at IHS, did not mention the quantum of moderation, but said in a report today that Malaysia would be experiencing both positive and negative effects.

Last month, the World Bank cut its 2015 growth forecast for Malaysia’s economy to 4.7% from an earlier estimate of 4.9% on expectations of slower export growth and investments in the oil and gas industry.

Malaysia’s own Ministry of Finance expects a GDP of 5.6% for the year 2015 compared to 5.9% in 2014.

Biswas said Malaysia would be benefiting from lower inflationary pressures, with the decline in oil prices, having allowed crucial fiscal reforms with the removal of fuel subsidies.
 
Conversely, it would also suffer significant negative impact on exports and fiscal revenue, since Malaysia is an oil and gas exporter, he said.

Biswas said many industries in the Asia-Pacific region would be clear beneficiaries from the slump in oil prices.

“The Asia-Pacific transport sector will be a significant winner, since fuel is a large input cost for commercial aviation, as well as road haulage and shipping,” he said.

He pointed out that jet fuel accounted for around 30% of total input costs for the airline industry, and the sharp drop in oil prices would help to drive down airline fares and boost passenger and air cargo traffic.