More Moderate Growth And Inflation In 2H17

Economic Research	21 July 2017
Malaysia
Economic Update
More Moderate Growth And Inflation In 2H17 We gather from the meeting with BNM that the Malaysian economy would likely continue to expand at close to its potential output level in 2H17, albeit slowing from a strong growth in 1H, as strong export growth normalises. Indeed, the Central Bank expects the economy to grow at the country’s potential output growth of around 4.9-5.5% in 2017. The trend of slowing growth is broadly in line with our expectation. We expect real GDP growth to soften to 4.5% YoY in 2H17, from +5.2% estimated in 1H. For the full year, however, we expect real GDP growth to pick up to 4.8% in 2017, from +4.2% in 2016 and the growth is expected to strengthen to 5% in 2018, on the back of a sustained growth in exports and domestic demand. Economist:  Vincent Loo Yeong Hong  | +603 9280 2172 Economist:  Aris Nazman Maslan  | +603 9280 2184