Highlights of Bank Negara Malaysia’s 2018 reports

27 Mar 2019 / 17:58 H.

KUALA LUMPUR: The following are highlights of Bank Negara Malaysia’s (BNM) Annual Report and Financial Stability and Payment Systems Report 2018:

* The Malaysian economy is expected to remain on a steady growth path, expanding between 4.3% and 4.8% in 2019, anchored by private sector activity, stable income and employment growth, and sustained capacity expansion by businesses.

* Services sector is projected to grow by 5.7% from 6.8% in 2018.

* Manufacturing sector is forecast to expand by 4.8% compared with 5% last year.

* Construction sector’s growth is expected to continue moderating this year to 3% from 4.2% in 2018.

* Mining and quarrying sector is set for growth of 0.8%, reversing the 1.5% contraction in 2018 caused by a fall in natural gas production.

* Agriculture sector is poised to expand by 2.8% this year after easing 0.4% in 2018.

* Unemployment rate is expected to remain relatively unchanged at 3.3 to 3.5% this year from 3.4% in 2018.

* Private investment is projected to register a growth of 4.9% in 2019.

* Private consumption is forecast to expand by 6.6% this year.

* Public Investment is expected to contract by 7.1% due mainly to lower investment by public corporations following the completion of large-scale projects.

* The current account balance is projected to remain in surplus, albeit narrowing to 1.5% - 2.5% of gross national income (GNI) in 2019.

* Malaysia’s exports are expected to record a growth of 3.4% this year compared with 6.8% in 2018.

* Imports would be supported by continued domestic demand, with gross imports projected to expand by 4.5% in 2019 (2018: 4.9%) on account of a turnaround in intermediate and capital imports.

* Malaysia’s headline inflation is expected to be broadly stable and average between 0.7% and 1.7% in 2019 compared to 1% in 2018.

* Malaysia’s external debt, which stood at RM924.9 billion or 64.7% of gross domestic product (GDP) as at end-2018, is still manageable, despite being relatively higher in comparison to the emerging market economies’ (EMEs) median peer countries.

* BNM has declared a dividend of RM2.5 billion for the government for 2018.

BANK

* BNM’s the latest multi-year solvency stress test exercise continued to affirm the resilience of banks and insurers under simulated scenarios of severe macroeconomic and financial strains.

* Banks remain well-positioned to absorb potential losses using available capital and earnings buffers, with post-stress capital ratios of the banking system continuing to be well above regulatory minima.

HOUSEHOLD DEBT

* Malaysia’s household debt-to-gross domestic product fell to 83% last year from 84.3% in 2017 supported by macro prudential measures in strengthening household resilience.

* Growth in household debt in 2018 slowed further to 4.7%, mainly driven by slower growth in loans extended by non-bank financial institutions.

* Growth in personal financing, which drove the earlier rapid expansion in household debt, has moderated significantly following the implementation of a series of cross-cutting measures since 2012. Growth slowed to 2.3% in 2018 compared with 2.8% in 2017 (at the peak in 2008: 25.2%).

* In the property market, growth in house prices continued to ease amid weaker demand for higher-priced properties, which remained unaffordable for most buyers and less exuberant activity in the housing market in recent years.

* This is contributing to adjustments in housing supply towards more affordable segments. — Bernama

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