An economic analyst has projected that Malaysia will continue to see growth of its economy in the fourth quarter (Q4) of this year after the country just registered a high 6.2% growth rate in the third quarter (Q3)
Vishnu Varathan, head of economics and strategy at Mizuho Bank, said the country was riding on its manufacturing performance to cater for the export market, which was boosting jobs and contributing to the robust consumption.
He said there had also been an upturn in the oil sector after prices fell in June, with steadily rising prices being seen now.
“I think it has contributed quite a bit to Q3. This will continue to Q4 even after we discount the price effects,” he said in an interview with CNBC.
He, however, said the variability of the oil prices would be an important factor in the economic scenario.
“Sensitivity of the ringgit to oil price is going to be rather accentuated despite the fact that they (federal government) have broadened their revenue base to GST (goods and services tax).”
He said the disparity between the views on pricing by the Organisation of the Petroleum Exporting Countries (Opec) and the International Energy Agency (IEA) could be an influential factor in the variability of prices in Malaysia.
Vishnu also said the 2018 Budget tabled by Prime Minister Najib Razak on Oct 27 had helped his administration manage the risk they faced in the 14th general election due by August next year.
“They have handled that risk quite well,” he said.
In a statement earlier today, Bank Negara Malaysia said the country’s gross domestic product (GDP) grew at a faster pace of 6.2% in the third quarter of 2017 compared with 4.3% in the same period last year.
It said this was driven by domestic demand, particularly private sector spending.
Malaysia had registered a growth rate of 5.8% in the second quarter and 5.6% in the first quarter of this year.
It said the economy was on course to register a growth rate close to the upper range of the official projection of 5.2% to 5.7% for the whole of 2017.-FMT