KUALA LUMPUR: The Malaysia’s economic growth is expected to moderate to 4.2 per cent this year against 5.1 per cent recorded last year, says the Malaysian Institute of Economic Research (MIER).
It said domestic demand was expected to remain the main economic growth driver given the negative external developments.
“Private and government consumption will continue to be the key economic growth drivers,” it said in a statement.
MIER also said the economic growth pace in the first quarter moderated to 4.7 per cent due to slower growth in public consumption and net exports.
The services sector was also expected to continue playing an important role in driving the economy but recent data, however, suggest that there was a distinct possibility that services activity might slow down, going forward.
Meanwhile, the results of the second quarter MIER Business Conditions Survey (BCI), which covered the manufacturing sector, indicated a slower expanding manufacturing sector.
The BCI also revealed that sales, domestic and export orders in the third quarter would deteriorate and employment prospects were likely to remain subdued.
“Production volume would also drop further,” the survey added.
However, MIER’s Consumer Sentiment survey said households headed into the second quarter with confidence and they are going into the third quarter with hope.
“For consumers, things were looking up for now and they are keeping their fingers crossed for better times ahead,” it said, adding that shopping for major durables would be well on the cards in the coming months and would certainly bode well for the economy.
“Watch out, however, for the latest minimum wage initiative by the government for if production costs rises, battling higher consumer prices will be an ardous affair, besides derailing consumer spending plans,” the survey added. — Bernama