Page 163 - Malaysia Baharu 2018
P. 163
erly manner. This was partly continue to support domestic demand,
attributed to policies introduced by moderating investments and external
the Bank and the Financial Markets demand will affect overall growth. In
Committee (FMC) at end-2016. PR China, ongoing structural reforms
Foreign exchange liquidity improved to rebalance the economy are leading
following the introduction of the export to slower, but more sustainable
conversion measure. In addition, the growth. In other Asian economies,
reinforcement of the non-facilitation of growth will likely moderate despite
non-deliverable forward (NDF) stable domestic demand, as exports
transactions limited the spillovers react to the slowdown in the advanced
from speculative activities in opaque economies and PR China. Global trade
offshore markets. The magnitude of developments will remain a key factor
adjustments in the domestic capital affecting the 2019 outlook. Prolonged 6 | MALAYSIAN ECONOMY
markets also remained contained policy uncertainty could adversely
during the year due to sustained affect investment decisions and thus,
demand from domestic institutional longer-term productivity growth. Elevated
investors, which partially offset the investor uncertainty and bouts of
impact from these outflows. During the volatility in the financial markets will
year, domestic monetary and financial pose further risks of greater volatility
conditions, and continued healthy in capital flows to emerging market
growth in financing to the private economies. Overall, the balance of
sector were supportive of economic risks to the global growth outlook is
activity. The Bank’s monetary tilted to the downside.
operations ensured sufficient liquidity
to support the orderly functioning of Against the backdrop of a challenging
money and foreign exchange markets. global environment, the Malaysian
The contractionary impact on liquidity economy is expected to sustain its
arising from large capital outflows was growth momentum, expanding by
offset by the Bank’s liquidity injection 4.3% – 4.8% in 2019 (2018: 4.7%).
operations undertaken through the Domestic demand will remain the
reverse repo and foreign exchange anchor of growth, underpinned by
swap facilities. As a result, price continued expansion in private sector
discovery in the domestic money activity. Private consumption growth
market remained uninterrupted and is expected to moderate, but remain
money market rates remained stable firm supported by stable labour
during the year. Overall banking market conditions and continued wage
system liquidity remained sufficient growth. The implementation of several
to support the financial intermediation government measures, particularly
process. Net financing to the private aimed at alleviating rising cost of
sector recorded an annual growth of living, is expected to further support
5.6% as at end-2018 (2017: 6.3%). consumption spending, especially
Higher growth in outstanding loans by lower income households. Private
of 4.8% was mainly driven by the investment activity will be supported
business segment. by the implementation of on-going
multi-year projects, particularly in the
Outlook for the Malaysian manufacturing and services sectors.
Economy in 2019 The normalisation of destocking
activities by firms after the strong
In2019, the globaleconomyisprojected demand during the tax holiday period
to expand moderately, following in 2018 will serve as an additional
slower growth in both advanced and support to growth. Public sector
major emerging market economies. In expenditure, however, is expected
the advanced economies, economic to weigh on growth. The projected
activity is projected to moderate. contraction in public investment will
While labour market strength will be due mainly to lower investment
161
attributed to policies introduced by moderating investments and external
the Bank and the Financial Markets demand will affect overall growth. In
Committee (FMC) at end-2016. PR China, ongoing structural reforms
Foreign exchange liquidity improved to rebalance the economy are leading
following the introduction of the export to slower, but more sustainable
conversion measure. In addition, the growth. In other Asian economies,
reinforcement of the non-facilitation of growth will likely moderate despite
non-deliverable forward (NDF) stable domestic demand, as exports
transactions limited the spillovers react to the slowdown in the advanced
from speculative activities in opaque economies and PR China. Global trade
offshore markets. The magnitude of developments will remain a key factor
adjustments in the domestic capital affecting the 2019 outlook. Prolonged 6 | MALAYSIAN ECONOMY
markets also remained contained policy uncertainty could adversely
during the year due to sustained affect investment decisions and thus,
demand from domestic institutional longer-term productivity growth. Elevated
investors, which partially offset the investor uncertainty and bouts of
impact from these outflows. During the volatility in the financial markets will
year, domestic monetary and financial pose further risks of greater volatility
conditions, and continued healthy in capital flows to emerging market
growth in financing to the private economies. Overall, the balance of
sector were supportive of economic risks to the global growth outlook is
activity. The Bank’s monetary tilted to the downside.
operations ensured sufficient liquidity
to support the orderly functioning of Against the backdrop of a challenging
money and foreign exchange markets. global environment, the Malaysian
The contractionary impact on liquidity economy is expected to sustain its
arising from large capital outflows was growth momentum, expanding by
offset by the Bank’s liquidity injection 4.3% – 4.8% in 2019 (2018: 4.7%).
operations undertaken through the Domestic demand will remain the
reverse repo and foreign exchange anchor of growth, underpinned by
swap facilities. As a result, price continued expansion in private sector
discovery in the domestic money activity. Private consumption growth
market remained uninterrupted and is expected to moderate, but remain
money market rates remained stable firm supported by stable labour
during the year. Overall banking market conditions and continued wage
system liquidity remained sufficient growth. The implementation of several
to support the financial intermediation government measures, particularly
process. Net financing to the private aimed at alleviating rising cost of
sector recorded an annual growth of living, is expected to further support
5.6% as at end-2018 (2017: 6.3%). consumption spending, especially
Higher growth in outstanding loans by lower income households. Private
of 4.8% was mainly driven by the investment activity will be supported
business segment. by the implementation of on-going
multi-year projects, particularly in the
Outlook for the Malaysian manufacturing and services sectors.
Economy in 2019 The normalisation of destocking
activities by firms after the strong
In2019, the globaleconomyisprojected demand during the tax holiday period
to expand moderately, following in 2018 will serve as an additional
slower growth in both advanced and support to growth. Public sector
major emerging market economies. In expenditure, however, is expected
the advanced economies, economic to weigh on growth. The projected
activity is projected to moderate. contraction in public investment will
While labour market strength will be due mainly to lower investment
161
