KUALA LUMPUR: The World Bank says Malaysia’s economy has remained resilient to external headwinds. It maintained the 4.4 per cent GDP growth forecast for 2016.
The 0.1 per cent decrease in its projection versus that made in December last year was due to the slowing in private consumption growth. Private investment growth is expected to be moderate as commodity prices and global economy growth remain subdued.
The World Bank, in its latest Malaysia Economic Monitor, also described Malaysia’s fiscal consolidation as on track despite lower oil-related revenues. Overall export growth is expected to remain stagnant amid low commodity prices and weak global growth. “However, a well-diversified export base, mainly in manufacturing goods, continues to provide support for exports.”
Import growth will also moderate in line with lower export and investment growth and its expectation is for the current account surplus to moderate to 2.1 per cent of GDP in 2016 (from 3.0 per cent in 2015 and 4.4 per cent in 2014).
“The financial system remains strong and overall lending remains supportive of economic activity,” it said, adding that exchange rate flexibility should remain the main shock absorber in the economy. While macroeconomic management has been solid, Malaysia’s main challenge and opportunity lies in accelerating structural reforms.
