IMF: Malaysia making progress on reform agenda

The statement was issued after the IMF team led by Nada Choueiri visited Kuala Lumpur and Putrajaya from Dec 5-17 to conduct discussions for the 2020 Article IV Consultation with Malaysia.

KUALA LUMPUR: Malaysian authorities are making progress on their reform agenda, with real gross domestic product (GDP) growth holding up and is projected at 4.5% for 2019, driven by domestic demand, according to the International Monetary Fund (IMF).

Malaysia’s headline inflation is expected to remain subdued at slightly under 1% this year while the current account surplus is expected to increase to 3.5% of GDP in 2019, it said in a statement.

The statement was issued after the IMF team led by Nada Choueiri visited Kuala Lumpur and Putrajaya from Dec 5-17 to conduct discussions for the 2020 Article IV Consultation with Malaysia.

“Looking ahead, real GDP growth is projected stable at 4.5% in 2020, with domestic demand remaining the main driver of growth, while continued trade tensions between the United States and China are expected to have an overall adverse impact on Malaysia’s growth. Inflation should average at 2.1%, ” she said.

The risks to the growth outlook are on the downside given that on the external side, Malaysia is vulnerable to escalating trade tensions, an abrupt deterioration in market sentiment towards emerging markets and weaker-than-expected trading partners’ growth.

Domestically, the downside risks are a sharp drop in real estate prices or a deterioration in household debt service ability.

However, the finalisation of a sustainable phase-one deal between the United States and China is an upside risk for Malaysia. — Bernama