The Department of Statistics will release the third quarter GDP figures on November 17. To celebrate…

How fast do you think did the Malaysian economy expand in 3Q18 from a year ago?

View Results

Loading ... Loading ...

Before you play the game yet again, here is some background.

The 2Q2018 GDP grew slowly at 4.5% YoY, largely due to an unexpected major gas supply disruption in west Malaysia. The relatively weak growth was enough for many economists to lower their expectations for Malaysia’s 2018 growth rate. The necessary repairs will take time and supply disruption will likely last until early next year. This can be seen from the industrial production index, where the mining component has been declining since May, diverging away from the other components.

And then of course, there was a change in government, which had affected public procurement policy, with major cleaning-up exercise relating to overpriced megaprojects. There had been some public spending slowdown due to the need to recalibrate everything towards a more transparent system, which means the use of open tender throughout the government system. But things are picking up again. More importantly, there had not been any austerity despite loose talks to the contrary. The recent budget should be proof enough.

Meanwhile, strong consumption expansion had hit the trade balance by a bit: for the third quarter, trade surplus did shrink by 4.1% YoY. But with the sales & service tax back online in September, the surplus ballooned RM15.3 billion as imports dropped amid rising exports.

But the unexpected economic stimulus the economy received in the form of 3-month tax holiday from June until August should more than balance out the supply shocks. Consumption should be expanding stronger than it did in it did in the second quarter, which was already growing at an above average rate of 8.0% YoY.

So, I expect a growth pick up for 3Q3018.

Trackback URI | Comments RSS

Leave a Reply

*