Poll: Slower growth for Malaysian economy in Q1

KUALA LUMPUR: Malaysia’s economic growth slowed in the first quarter of 2018 as export growth lost momentum, a Reuters poll showed, and the outlook for the rest of the year was clouded by uncertainty over the new government’s policies following a shock election result.
The median forecast from the poll of 11 economists was for annual growth of 5.5% in January-March, compared with the previous quarter’s 5.9%.
If correct, it would mark a second straight quarter of slowing growth. First quarter growth forecasts ranged from 5.4% to 5.7%.
“It’s a bit of a modest slowdown ... it seems from trade data that it has started to slowdown in Q1,” said Brian Tan, an economist with Nomura in Singapore.
Economists polled expect full-year 2018 growth to be at the lower end or below the central bank’s projection of 5.5% to 6.0%, though forecasts could change once the new elected government headed by veteran leader Tun Dr Mahathir Mohamad provides clarity on its fiscal policies.
“At this point it’s too premature to revise (full-year figures),” said Julia Goh, a Malaysia-based economist with UOB.
“We will relook the numbers once we get greater clarity on fiscal policy and after more details are released.”
Malaysia’s 2017 full-year growth came in at 5.9%, its best in three years and an acceleration from 2016’s 4.2%.
After posting 12.7% export growth, in ringgit terms, during the fourth quarter of 2017, export growth slowed to 5.8% in the first quarter of 2018.
Tan noted a fall off in crude palm oil exports, which totalled RM11.5 billion in the first quarter, down 5.7% from the same quarter a year ago.
Bank Negara Malaysia kept its key interest rate unchanged at 3.25% last Thursday, a day after Malaysia’s voters dumped incumbent prime minister Datuk Seri Najib Abdul Razak, inflicting the first ever defeat on the Barisan Nasional coalition that had led Malaysia since the country’s independence from British colonial rule.
The central bank raised its rate by 25 basis points in January, making its first increase since July 2014, and the first change since July 2016 when it slashed the rate by 25 basis points.