Bank Negara: Economy to grow by 4.3% to 4.8% in 2019

AmBank Research expects Bank Negara Malaysia

KUALA LUMPUR: The Malaysian economy is expected to sustain its growth momentum and expand by between 4.3% and 4.8% in 2019 compared with 4.7% last year anchored by private sector activity, supported by stable income and employment growth, as well as sustained capacity expansion by businesses. 

According to Bank Negara's Annual Report 2018 released on Wednesday the well-diversified export structure, in terms of products and markets, will help soften the impact of moderating global growth on external demand.

“New production facilities and the recovery from the supply disruptions in the commodity sector will provide additional impetus to domestic economic activity. 

“The well-developed financial system with strong financial institutions will ensure that domestic financing conditions remain supportive of the changing needs of the economy,” it said.

Bank Negara said output from new manufacturing production facilities that will begin operating in 2019 will lend further support to growth. 

“These facilities include large oil refinery and petrochemical facilities, as well as electrical and electronics (E&E), chemicals and rubber plants,” it said. 

On the services sector, it is expected to grow at a slightly faster of 6.8% compared with 5.7% in 2018. However, the manufacturing sector is expected to grow at slower pace of 4.8% from 5%. 

The mining and agriculture sectors are expected to record positive growth rates amid recovery in natural gas production and higher palm oil output.

As for the mining sector, it is expected to expand by 0.8% vs a contraction of -1.5% in 2018 while the agriculture sector is expected to rebound and grow by 2.8% compared with a  contraction of -0.4%.

Since the large petrochemical projects in civil engineering sub-sector have been completed, the construction sector is expected to grow at a slower pace of 3% from 4.2% in 2018.

In addition, the oversupply situation in the property market could dampen activity in the construction sector.