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Malaysia’s economy to grow by five per cent in 2015

[ 03-01-2015 ]
Malaysia’s economy to grow by five per cent in 2015

KUCHING: Malaysia’s economic growth is forecast to grow by five per cent next year.

AllianceDBS Research Sdn Bhd (AllianceDBS Research) in a report yesterday said the slower growth could be attributed to the expectations of softening consumption and export growth.

AllianceDBS Research economist Manokaran Mottain said, “The uncertainties in the global economic outlook since the latter part of 2014 have set in motion subdued economic prospects for 2015.

“Malaysia’s growth is expected to soften to five per cent in 2015, slower than our previous forecast of 5.2 per cent and an estimated 5.8 per cent for 2014.

“Beside the downside risks to export performances due to the uncertain external conditions, the domestic economy also has to face headwinds from the expected slowdown in consumption growth.

“On the supply side of growth, manufacturing activities is expected to register a slower growth of 4.4 per cent in 2015, while the service sector growth would likely moderate to 5.3 per cent in 2015, down from a forecast of 6.2 per cent in 2014,” he said.

Manokaran added that rising geopolitical tension and falling commodity prices have weighed down on the prospects of the global economy. He said the developments of those events have set the tone for a subdued outlook for 2015.

In the meantime, he believed private investment growth would remain steady in 2015 due to committed investment in projects under the 10th Malaysia Plan (10MP).

Furthermore, he observed various infrastructure projects announced during Budget 2015 added with ongoing investments under the Economic Transformation Programme (ETP) will continue to lead public sector’s contribution to growth.

On construction activities, the research firm expect the growth rate to remain steady at around 11 per cent in 2015 partly supported by the infrastructure projects nearing completion under the 10MP.

“In 2015, we look forward to the announcement of the 11th Malaysia Plan (2016 – 2020), which is due in June 2015.

“The government is expected to layout the broad scope of developmental plans for the remaining decade of the country’s reach towards high-income nation status by 2020.

“We expect the government to update its economic policies to nurture growth that is more competitive and also provide some socioeconomic safety nets for the targeted low-income groups,” he said.

As for trade performance in 2015, Manokaran expects slowdown in growth of key exports destinations such as China, Japan, European Union and Singapore to affect Malaysian export growth.

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