A More Robust Economy Expected in 2017

Economic Research	22 May 2017
Malaysia
Economic Update
A More Robust Economy Expected in 2017 Malaysia’s real GDP growth recorded a stronger growth of 5.6% YoY in 1Q17, up from +4.5% in 4Q16, on the back of stronger external activities and domestic demand. Going forward, we expect the strong growth of the external sector to continue spilling over to the domestic side in the quarters ahead. Nonetheless, we expect the real GDP growth to moderate in 2Q and 2H 2017, as the strong export growth tapers off. Still, we are revising our 2017 real GDP forecast upwards to a growth of 4.8% (2016: 4.2%) from our previous estimate of 4.5%, on account of: 1.   A stronger-than-expected recovery in exports, particularly in 1Q17, that could boost overall economic activity; 2.   A pick-up in domestic demand, as higher export growth would trickle down to an improvement in consumer spending and private investment; and 3.   Modest increase in public spending and investment. Economist:  Vincent Loo Yeong Hong  | +603 9280 2172 Economist:  Aris Nazman Maslan  | +603 9280 2184