Malaysia to see moderate growth of 5% to 5.5% in 2018

PETALING JAYA: The Malaysian economy is expected to remain resilient in 2018, with real gross domestic product (GDP) expanding between 5% and 5.5%, slightly lower than the 5.2% and 5.7% growth projection for 2017, led by domestic demand amid favourable external sector. Domestic demand is forecast to moderate to 5.5% in 2018 from 6.4% in 2017.
Private sector expenditure is seen to be the primary driver of growth with private investment and consumption growing 8.9% and 6.8% respectively.
However, public sector expenditure is forecast to decline 0.4%, in line with lower capital outlays by public corporations.
On the supply side, all sectors are expected to see a moderation in growth, except for mining which is projected to grow from 0.5% in 2017 to 0.9% in 2018.
The services sector, the major GDP contributor with 54.5% share, could see a slight drop of 1% from 5.9% in 2017 to 5.8% in 2018.
Meanwhile, agriculture, manufacturing and construction are estimated to grow 2.4%, 5.3% and 7.5% respectively.
Malaysia's external position is forecast to remain favourable supported by global growth and trade. Gross exports are projected to expand 3.4% to RM948.7 billion, led by continued demand for electronics and electrical products and commodities.
Gross imports are forecast to grow 3.5% to RM851.7 billion reflecting steady investment activity.
Overall, the current account balance is forecast to register a surplus of RM32.9 billion or 2.3% of gross national income (GNI) in 2018, higher than the expected RM32.3 billion in 2017 or 2.5% of GNI.
The GNI per capita is expected to increase 5.1% from RM40,713 in 2017 to RM42,777 in 2018.
In line with fiscal consolidation efforts, the fiscal deficit will further decline to 2.8% of GDP in 2018 from 3% in 2017.
Accordingly, the federal government debt remains sustainable within the prudent limit of 55% of GDP.
These developments will further strengthen the nation's economic fundamentals and resilience to further propel the country towards the milestones of an advanced and high-income nation by 2020, doubling the size of the economy to RM2 trillion in 2025.