SERC cuts GDP forecasts for Q2 and 2018 on slower growth momentum

KUALA LUMPUR: The Socio-Economic Research Centre (SERC) has revised downward the economic growth projections for both the second quarter (Q2) and the whole of 2018 in anticipation of a slower growth momentum ahead.
Gross domestic product (GDP) for Q2 is now expected to expand slower at 5.4% from the initial forecast of 5.7%, while the full-year growth could moderate to 5.2% from 5.5% on the back of external headwinds and domestic developments, including the current policy transition period, said SERC executive chairman Lee Heng Guie at a media briefing here today.
Despite the cut in growth forecasts, he said the whole Malaysian economy is still healthy with domestic demand and exports being the supporting factors.
On the ongoing US-China trade war, Lee believes that the impact can still be contained at current levels, but he cautioned that the conditions will change if tensions were to escalate, especially if the US imposes tariffs amounting to a whopping US$500 billion on Chinese goods as previously mentioned by President Donald Trump.