KUALA LUMPUR (Nov 4): The ringgit is expected to remain weak at RM3.25-3.35 per US dollar (USD) on USD strength, more moderate growth outlook, narrowing current account surplus and a pause in OPR, according to Hong Leong IB Research (HLIB)

In its 2015 economic outlook released Tuesday, the research house said it   expects the world economy to grow moderately by 3.6% in 2015 (2014f: +3.3%).

It said prospects for the advanced economies continue to diverge, with the US expected to gain solid growth momentum while the Euro area and Japan continue to struggle for marginal expansion.

HLIB said the outlook of emerging markets (EMs) in 2015 would be generally capped by softer export boost due to uneven global growth and domestic growth-constraint issues.

“On policy rate, we expect the Fed to stick to its rate hike plan, with first rise in Jul-2015.

“EM central banks will prioritise to safeguard growth momentum as upside risk to inflation is limited,” it said.

Closer at home, HLIB expects Malaysia to grow at slower pace of 5.0% in 2015 (2014f: +6.0%) with negative contribution from net exports and slower consumer spending growth.

It said all sectors were expected to record softer growth except mining.

“We expect inflation to trend higher to 4.0% in 2015 (2014f: +3.2%), driven by cost factors i.e. GST and new fuel subsidy scheme. We impute milder GST impact given broadened exemption list and weaker consumer spending.

“We see Bank Negara Malaysia standing pat throughout 2015 given growth moderation, slower financial activities, waning enthusiasm on property speculation and contained inflation risk,” it said.