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Malaysia lowers 2018 growth forecast to 5 percent

The Malaysian Central Bank on August 17 revised down the country’s growth forecast this year to 5 percent, after its gross domestic product (GDP) in the second quarter came in sharply below its expectation.
Malaysia lowers 2018 growth forecast to 5 percent ảnh 1The headquarters of the Malaysian Central Bank (Photo: malaysia-chronicle)

Kuala Lumpur (VNA) – The MalaysianCentral Bank on August 17 revised down the country’s growth forecast this yearto 5 percent, after its gross domestic product (GDP) in the second quarter camein sharply below its expectation.

At a press briefing to announce the latest GDP data, the central bank'sgovernor, Nor Shamsiah Mohd Yunus, said the first half GDP growth of 4.9percent was lower than expectation, so the bank has revised down its full yeargrowth to reflect recent global tensions. 

The bank earlier projected Malaysiato grow between 5.5 percent to 6 percent this year. However, after posting aGDP growth of 5.9 percent last year, the country's growth moderated to 5.4percent in the first quarter.

It even posted a poorer growth of 4.5percent in the second quarter due to commodity-specific shocks in the miningand agriculture sectors.
 
According to Nor Shamsiah, Malaysia’sgrowth this year will be supported by private sector spending due to taxholiday from June to August.

The Malaysian government abolishedthe goods and services tax in June, and will reintroduce the new form of salesand service tax in September.

She said one of the bright spots forQ2 growth was higher private investment growth of 6.1 percent amid continuedhigh capacity utilisation. Private consumption also grew strongly by 8 percent,supported by continued income growth and better sentiments.

Nor Shamsiah said further escalationof trade tensions and financial market volatility are the two key risks foreconomy. If global trade dispute escalates and affects more products andcountries, global growth will be dragged and the Malaysian economy will beaffected.

However, she still believed thesustained domestic activities will provide some cushion to the country. -VNA
VNA

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