January 20, 2021 House of Trust

Economic Outlook 2019

The Fiscal and Economics Division of the Ministry of Finance Malaysia recently released the Economic Outlook 2019. Here are a few interesting highlights from the economic outlook: 

  • The global economy is expected to expand by 3.7 per cent in 2018 and 2019, lower than the earlier forecast of 3.9 per cent by the International Monetary Fund, which reflects elevating policy uncertainties with several risks to growth stemming from escalating trade tension and outflows of capital from emerging economies
  • Outlook for the Malaysian economy remains resilient in the near term despite considerable external and domestic headwinds, whereby GDP is projected to expand 4.9% in 2019 compared with 4.8% in 2018. 

  • Monetary policy in Malaysia is supportive and would remain accommodative of economic growth while ensuring price stability next year, with the adjustment to depend on risks surrounding the outlook for domestic growth and inflation. 
  • Private sector expenditure, in particular household spending, will remain as the anchor of growth following a continuous increase in employment and wages amid benign inflation
  • Public expenditure is projected to record a slower growth following initiatives taken by the government to review and reprioritize expenditure as well as lower capital spending by public corporations
  • Private investment is anticipated to expand with capital outlays mainly channeled into the services and manufacturing sectors
Source: Economic Outlook 2019, Ministry of Finance
  • Services sector is expected to remain as the largest contributor, benefiting from steady consumer spending. In addition, the services sector is supported by domestic tourism activities, as well as strong demand for information and communications technology, transport and finance. 
  • Manufacturing sector is projected to register firm growth primarily driven by continuous demand for electrical and electronics products.
  • Agriculture and mining sectors are forecast to rebound next year after a marginal contraction in 2018 following an increase in the production of crude palm oil and liquefied natural gas.
  • Construction sector is expected to moderate in 2019 following the near completion of infrastructure projects as well as property overhang, particularly in the non-residential segment.
  • Malaysia is also expected to retain the global leader position in Islamic finance with strong demand from both households and businesses for Shariah-compliant financial products and services. 

Attached below is the Key Data and Forecast of the Economic Outlook 2019: 

Here are the 4 chapters of the Economic Outlook 2019 

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