Growth in the 1H of 2017 was driven by private consumption and private investments on the demand side
By P PREM KUMAR / Pic By MUHD AMIN NAHARUL
Malaysia is expected to maintain its economic performance in the second-half (2H) of the year after recording a gross domestic product (GDP) expansion of 5.7% in the 1H.
Second Finance Minister Datuk Seri Johari Abdul Ghani said the Malaysian economy should sustain its growth momentum in the 2H, save for any major global events.
Still, Johari said “Growth in the 1H of 2017 was driven by private consumption and private investments on the demand side. On the supply side, the thrust was by the services, construction and manufacturing sectors,” Johari added.
Johari further said that the Malaysian economy is currently more resilient than in 2016 and previous years, where the country was still recovering from the external economic uncertainties and downfall of global oil price.
“Despite being impacted by some external factors, the economy was still able to register good growth compared to other countries in the region by ensuring its sustainability,” he said.
On the ringgit, Johari said the currency has stabilised following the government’s move to ask exporters to convert foreign currency to it, and restrict financial institutions from engaging with the offshore non-deliverable forwards market, among other measures.
However, Johari maintained that the government needs to remain alert on the currency’s movement as external factors still pose threat to the currencies.
“There is a need to remain alert as factors affecting the ringgit remain, such as the uncertainties surrounding the interest rate in the US, China’s economic growth and commodity prices.”
Meanwhile, earlier in his speech, Johari outlined three strategic areas that have been identified by the government to strengthen Malaysia’s economic resilience and drive an inclusive and sustainable economic growth for the future.
Firstly, he said the goverment would ensure the country’s economic growth and development agenda are well distributed across the nation, as people living in small townships and rural areas are equally presented with economic opportunities.
Secondly, the government is positioning itself to become a serious competitor in the digital economy, where in 2015, the contribution of Malaysia’s digital economy to the GDP stood at 17.8% and almost realised the targeted 18.2% set for 2020.
“We believe that the digital economy can be our new forte and act as catalyst to enhance the country’s income to RM2 trillion in the next seven to eight years,” he added.
Finally, Johari said the government intends to ensure that the financial system remains solid and ready for the future, among others, to strike the right balance between supporting technologies such as financial technology as an enabler of growth and mitigating the potential risks at the same time.
“We are also working hard to increase the level of financial inclusion, increasing the depth of our financial system, making it easier for businesses to have access to funding while at the same time, increasing the standard of financial literacy among Malaysians.”