KUALA LUMPUR: Private consumption growth was likely in “sharp correction” last quarter, with effects continuing in 1Q and 2Q this year, Fitch Solutions Macro Research says in report.
Consumption will be supported by RM37bil one-time payment of tax refunds in 2019, tight labour market and low inflation.
Fitch lowered real GDP growth forecast to 4.2% in 2019, from 4.5%, due to exports and investment growth concerns.
Risk seen in high level of household debt at 68% of GDP in June 2018.
Growth of households loans has slowed however, after peaking in August during the tax holiday period when consumers front-loaded purchases.
Credit card loan growth has also eased from August peak.
Fitch sees average inflation at 1.4% in 2019.
Central bank likely to hold rates unchanged at 3.25% through 2019. - Bloomberg
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