GDP growth is expected to grow by +5.5% in 2017. Exports growth is set to pick up speed in 2017 driven by higher demand for electronic products and commodities from major economies. Domestic demand growth will remain strong. Private consumption growth is set to be firm supported by higher wages and improved job creation. Private investment is projected to expand at a solid pace sustained by higher new orders and favorable credit conditions. Yet public expenditures growth will be moderate as authorities continue fiscal consolidation.
In 2018, growth is set to continue at a solid but slower pace. Exports growth may moderate as tightening credit conditions in China lead to lower demand for Malaysian goods. Investment growth should slow due to lower growth in export opportunities and more conservative macro-policies.
Domestically, risks stem from a heavy public and households’ debt. Externally, difficulties could arise from lower demand growth from major economies, weak commodities prices and heightened global financial stress