IMF raises Malaysia GDP growth projection to 4.8%

KUALA LUMPUR: The International Monetary Fund (IMF) has raised Malaysia’s gross domestic product (GDP) growth projection for this year to 4.8% from 4.5%, on the back of savvy economic management and commendable monetary policies.
Malaysia registered a GDP growth of 4.2% last year, down from 5% in 2015 and 6% in 2014.
The country posted a 5.6% GDP expansion in the first quarter ended March 31 compared to the same quarter a year ago.
IMF economic counsellor and director of research department Dr Maurice Obstfeld noted that the fund remains optimistic on the country’s economic outlook moving forward.
“We have upgraded our growth outlook for Malaysia this year as we see successful efforts undertaken to increase the sustainability of debt which is on a downward trend.
“In addition, the country’s steady handling of monetary policy is commendable.
“Looking at the potential upsides moving forward, we are optimistic on Malaysia,” Obstfeld told reporters in a media briefing here yesterday.
The Asian Development Bank (ADB) also upgraded Malaysia’s growth outlook to 4.7% from 4.4% last week, on stronger GDP growth in the first quarter of the year, driven by rising exports and continued growth in the manufacturing sector.
The IMF’s and ADB’s projections remain within the official growth outlook ranging between 4% to 5%.
The IMF’s World Economic Outlook update report also pointed out that apart from Malaysia, economic growth in a number of Asean countries namely Indonesia, the Philippines, Thailand and Vietnam will remain robust at 5.1% collectively in 2017, underpinned by the pickup in global trade and strengthening of domestic demand.
On the global front, the fund predicts economic activities to accelerate further this year and in 2018, as cyclical economic recovery continues globally.
Economic activity in both advanced economies and developing economies is forecast to accelerate this year, to 2% and 4.6% respectively, with global growth projected at 3.5%.
Meanwhile, the leading index, an indicator of economic activities including the KLSE Industrial Index expected sales value of manufacturing and real imports of semiconductors, registered a growth of 1.2% to 118.6 points in May, with six of the seven index components recording positive growth.
The Statistics Department said the coincident index, which measures current economic activity, rose by 0.9% in May.
The annual change of the coincident index recorded the highest growth in 2017, increasing to 4.5%.
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