Malaysia’s gross domestic product (GDP) might grow just by 4.6 percent in the fourth quarter of 2018 as opposed to the 4.9 percent growth observed in the third quarter, predicts Kenanga Investment Bank’s study Malaysia Economic Outlook 4Q18.
In 2017, the full-year GDP growth projection was 5.7 percent. For 2018, that prediction has slowed down to 4.8 percent. The report cites geopolitical changes and the uncertainty that surrounds an election year is instrumental in yielding lower growth numbers.
“Coupled with a less sanguine global GDP growth outlook next year, we expect GDP growth to remain weak at 4.7% in 2019,” according to the report.
The country has been battling internal battles such as high debt and a mounting fiscal deficit. Moreover, on an international level, Malaysia is also affected by the burgeoning trade war between the US and China, policy decisions made by the US Fed and slow economic growth.
Just like the currencies in other emerging markets, the ringgit is also under stress with the USD/ ringgit report. The report has revised its prediction to RM4.10 from 3.85 because of “less sanguine” economic forecast.
Even though, the country’s GDP got a boost in the earlier half of the year because of higher consumer demand thanks to tax holiday season, the later half of the year’s performance does not seem so promising for the next year.
Going forward, the slow pace of GDP growth might have an impact on the employment opportunities available in the country.