External Demand To Drive Growth For 2H17F

Economic Research	21 June 2017
Malaysia
Economic Outlook
External Demand To Drive Growth For 2H17F Malaysia’s real GDP growth picked up to 5.6% YoY in 1Q17 from +4.5% in 4Q16 and compared to +4.3% in 3Q16. This was underpinned by a stronger external activities and domestic demand. We expect export growth to continue expanding in 2H, albeit at a more moderate pace after a surge in 1H. As a result, we expect the real GDP growth to normalise in 2H17 and expand by 4.5% YoY, albeit a slowdown from +5.2% estimated for 1H. For the full-year, we forecast real GDP to grow by a quicker pace of 4.8% in 2017, from 4.2% in 2016, on account of:     i.   A stronger recovery in exports, boosting overall economic activity;    ii.   A pick-up in domestic demand, as higher export growth would trickle down to improvement in consumer spending and private investment; and   iii.   A modest increase in public spending and investment on improving revenue. Economist:  Vincent Loo Yeong Hong  | +603 9280 2172 Economist:  Aris Nazman Maslan  | +603 9280 2184