PETALING JAYA: Malaysia has shown a strong recovery from the fallout of the Covid-19 pandemic but it is not out of the woods yet, according to 18 economists polled by Reuters last week.
For a start, they said, a global economic slowdown would likely have an impact on the economy.
As DBS economist Chua Han Teng pointed out, while exports grew, Malaysia’s open economy meant that it was also exposed to global economic headwinds such as the slowdown driven by the US Federal Reserve’s tightening policy and the European energy insecurity resulting from the Russia-Ukraine conflict.
The economists, polled from Aug 3 to Aug 9, also predicted that Malaysia, which is Southeast Asia’s third largest economy, would have seen its economy expand 6.7% in the second quarter (Q2) of this year, making it the fastest growth in a year.
According to the Reuters report, the economists also forecast an annual gross domestic product (GDP) growth of 5.2% to 9.2%, which is higher than the 5% achieved in the preceding quarter. The GDP data is due to be released on Friday.
Vincent Loo of KAF Investment Bank attributed the growth to a rise in private consumption as well as the 30% year-on-year growth in exports. Loo noted that exports grew 22% in Q1.
He also expects GDP growth to accelerate further in Q3 before normalising in Q4 and into 2023 on the back of slowing global trade, rising inflationary pressure and tighter monetary conditions.
Malaysia’s economy has rebounded strongly since it reopened its borders in April as part of a move to ease Covid-19 restrictions.
Reuters said a separate poll it also conducted showed that Malaysia’s economy would likely see a 6.5% growth this year, higher than the Bank Negara Malaysia forecast of 5.3% to 6.3%. However, those polled also expect the growth to ease to 4.6% in 2023.
