Domestic demand likely to support economy

AllianceDBS Research chief economist Manokaran Mottain, who does not expect a rate cut this year, told StarBiz any move in that direction would depend on the economy

IN its 2018 annual report, Bank Negara has been realistic of the global uncertainties, as it has revised its forecasts lower as compared to the previous Treasury’s projection (gross domestic product: +4.9%) to a range of 4.3% to 4.8%in 2019. Slowdown is imminent in investment flows, external demand and growth in major industrial nations.

In China, we see further slowdown in view of the trade conflicts with the United States and structural policy reforms. Boom in debt over recent years, increasing unsold housing stock and corporate deleveraging continue to weigh on China’s economic growth. In the event that China is unable to engineer a soft-landing, this will result in a severe downturn in global commodity prices.