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WB revises upward Malaysia's 2017 GDP to 5.2%

  • The World Bank has revised Malaysia's GDP growth forecast for the year to 5.2% from 4.9% in June.

KUALA LUMPUR, Oct 4 (Bernama) -- The World Bank has revised Malaysia's Gross Domestic Product (GDP) growth forecast upwards for this year to 5.2 per cent from 4.9 per cent in June, on the back of a much stronger-than-expected actual growth of 5.7 per cent in the first half of 2017.

Originally, World Bank forecast Malaysia's economy to only grow by 4.3 per cent.

World Bank Malaysia Country Manager Faris Hadad-Zervos said the bank expected Malaysia to continue its growth trajectory route on high level growth.

"Upward estimates reflect Malaysia as an open economy, so the favorable external environment has helped fuel Malaysia's continued growth.

"Also, the country's policies have helped spur domestic demand and investments. These are all very positive," said Faris at a press conference to unveil the World Bank's October 2017 edition of the East Asia and Pacific Economic Update here today.

Malaysia's GDP for 2018 and 2019 have also been revised upwards by the bank, with economic activity projected to expand by 5.0 per cent (revised upwards by 0.5 per cent) and 4.8 per cent (up 0.3 per cent) for 2018 and 2019, respectively.

Faris added that there was a window of opportunity for more growth for Malaysia, suggesting that this was the time to accelerate (the economy) as current reforms were underway.

"We got to make sure this growth is not just one blip in the chart but the beginning of a longer-term trajectory to move Malaysia to high-income status and beyond," said Faris, adding the bank was also welcoming Malaysia's efforts in improving its digital economy.

Meanwhile, World Bank Country Lead Economist Richard Record commented that the revised upward forecast for 2017 stemmed from robust economic growth and in line with continued favorable leading indicators of near-term private sector activity and confidence.

Subsequently, the Malaysian economy was expected to sustain its current growth momentum into 2018 and 2019, albeit, at a more moderate pace, amid expectation of lower capital expenditure growth.

"Malaysia's higher growth estimated this year is due to the confluence of external and domestic factors. Faster than expected growth in advance economies, including China, had positively affected Malaysia's open economy as it is exposed to international trade flow.

"But, in the medium-term, we expect a gradual slowdown in China to have an impact on the Malaysian economy," he added.

Earlier, World Bank Chief Economist for the East Asia and Pacific Region Sudhir Shetty from Washington DC, via video conference, said improved global growth prospects and continued strong domestic demand underpinned a positive outlook for developing economies of East Asia and the Pacific.

He said stronger growth in advanced economies, a moderate recovery in commodity prices and the strengthening of global trade were favorably supporting the development of East Asia and the Pacific to expand by 6.4 per cent in 2017.

Growth in the region, however, was expected to slow slightly to 6.2 per cent in 2018 primarily reflecting China's gradual slowdown.

Several external and domestic risks could also impact the region's positive outlook, with uncertainty remaining over economic policies in some advanced economies and escalating geopolitical tensions.

 

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