Finance Minister Zafrul Aziz said the fourth quarter will be “challenging” for the Malaysian economy if major global headwinds such as Russia’s war with Ukraine and China’s zero-Covid policy continue. .
China is Malaysia’s largest trading partner, and trade and supply chain disruptions will “reduce some of Malaysia’s fourth-quarter growth expectations,” he said.
The Maybank Investment Banking Group also shares the same view.
The bank expects that rising domestic and international inflation and interest rates, along with signs of a slowdown in major economies such as the United States, Europe and China, will begin to have a “clear impact”. ” for the country’s economy from the fourth quarter onwards. , said Suhaimi Ilias, chief economist at Maybank IBG.
Zafrul said July-September growth will be strong, but this could be the result of a negative fundamental effect from the same period last year.
Malaysia’s gross domestic product reached 4.5% in the third quarter of 2021 due to contraction in all major economic sectors, mainly manufacturing and services sectors, Malaysian Bureau of Statistics reported.
Suhaimi said Maybank IBG expects another quarter to post moderate-to-high single-digit growth in the third quarter, around 7.5%, in part due to the economy’s slowdown last year at short.
Despite the challenges ahead, Zafrul said he is confident that Malaysia’s full-year economic growth will meet the government’s forecast.
“I’m still very optimistic that we’re going to get a GDP figure of 5.3 to 6.3%… Probably at the top of 6.3%,” he told CNBC.Squawk Box Asia“in Monday.
On Friday, Malaysia’s central bank announced that the country’s economy grew 8.9 percent in April-June from a year earlier.
That was boosted by stronger domestic consumption and tourism spending after Malaysia fully opened its international borders in April, Zafrul said.
“Domestic consumption increased strongly, much stronger than we expected,” he said.
Retail spending in June rose 44% year-on-year as fiscal stimulus from the government and pent-up demand from the pandemic boosted consumer spending, Zafrul said.
