BNM sees lower downside risks from trade tension in latest assessment

16 Aug 2019 / 14:50 H.

KUALA LUMPUR: Bank Negara Malaysia (BNM) sees lower downside risks for Malaysia this year in its latest assessment of the US-China trade war due mainly to the delay in the implementation of selected tariffs.

Governor Datuk Nor Shamsiah Mohd Yunus (pix) said Malaysia’s 2019 gross domestic product (GDP) may be lower by 0.1 percentage point (ppt) if there is a further escalation in the US-China trade war that may see global GDP drop by 0.1 ppt.

The further escalation of trade tensions will weigh on growth outlook, with the central bank also estimating that Malaysia’s exports may be lower by 0.2 ppt this year, as global trade is projected to shrink by 0.1 ppt.

In its Q318 Quarterly Bulletin, BNM warned that Malaysia’s 2019 GDP could be much lower by 0.9 to 1.1 ppt, while exports could be lower by 1.2 to 1.7ppt.

However, BNM is maintaining its projection for the Malaysian economy to grow between 4.3-4.8% this year.

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