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Malaysia: World Bank forecasts M’sia economy to grow 4.3%
PETALING JAYA: The World Bank expects Malaysia’s economy to grow by 4.3% this year as adjustments to lower energy prices ease and commodity prices stabilise.
This compares to the government’s expectations for the economy to grow by 4% to 4.5% this year.
Malaysia’s economy expanded 4.3% in the third quarter last year and economists expect gross domestic product (GDP) to grow by 4.2% in 2016.
The World Bank said in a report titled “Global Economic Prospects: Weak Investment in Uncertain Times” that growth among commodity exporting economies in the region will accelerate. “Indonesia is anticipated to pick up to 5.3% in 2017 from 5.1% in the year just ended thanks to a rise in private investment,” it said.
However, the report noted that the growth outlook has deteriorated in several small commodity exporters, such as Mongolia and Papua New Guinea, where the terms-of-trade shock has exacerbated domestic vulnerabilities.
Analysts do not expect global oil prices to trade above US$60 per barrel, while the average selling price of crude palm oil (CPO) for the year would be between RM2,700 and RM2,800 per tonne.
The government has an oil price assumption of US$45 per barrel for Budget 2017 based on expectations that the commodity glut will abate.
Meanwhile, CPO prices were about RM2,600 per tonne last year.
According to a Hong Leong Investment 2017 outlook report, macro indicators prove that the economy remains resilient and corporates in Malaysia have mostly evolved to become more cost-efficient due to the challenging operating environment.
The report added that Malaysia’s GDP growth is expected to stabilise this year, driven by a line-up of massive infrastructure projects and backing of firmer commodity outlook.
Source: http://www.thestar.com.my/business/business-news/2017/01/12/world-bank-forecasts-msia-economy-to-grow-43/