Saturday, August 15

Stronger confidence to push economy ahead

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KUCHING: Malaysia’s business confidence is expected to be stronger in the third quarter of 2017 (3Q17), with overall business performances in 3Q17 expected to advance more than triple compared to the same period last year.

MIDF Amanah Investment Bank Bhd’s research arm (MIDF Research) pointed out that heighten business confidence signals continuous growth.

“According to the Business Tendency Survey, overall business performances in the third quarter of 2017 is expected to advance more than triple compared to the same period last year.

“Based on the confidence indicator, third quarter performances was forecast to increase by 11.9 per cent, an improvement since the first quarter this year which saw one of the worst negative growth at 6.9 per cent.

“The upbeat momentum from first half is expected to carry on into the second half of the year indicating favourable investment climate for businesses,” it said in a report.

Based on this upbeat expectations of better business performances, MIDF Research believed that Malaysia gross domestic product (GDP) growth as well as private investment and consumption would expand steadily in 3Q.

It explained, “Malaysia’s GDP growth recorded at 5.8 per cent year-on-year (y-o-y) for the second quarter of 2017, expanding above 5.5 per cent for two consecutive quarters. The strong growth in the

second quarter is in line with the previous overall business confidence which stood at 4.5 per cent.

“Moving forward, we foresee GDP growth as well as private investment and consumption to expand steadily in the third quarter given the overall business confidence is at four-year high, 11.9 per cent and across most sectors shown sanguine outlook.”

Amid strong business confidences, MIDF Research maintained its estimates of 5.1 per cent growth for Malaysia’s economy this year.

“Due to high base effect, we expect external trade performance especially exports growth to moderate in the second half of year.

“Volatility in commodity prices remains as global challenge in the price  recovery process and hence put pressure on commodity-based economies including Malaysia to expand.

“Geopolitical threats as well as policy uncertainties remain as possible headwinds in the near term,” it added.