by NG MIN SHEN/ pic by TMR
MALAYSIA’S economy as measured by GDP grew 4.9% in the second-quarter of 2019 (2Q19), supported by higher household spending and private investment as all economic sectors continued to expand, according to Bank Negara Malaysia (BNM).
On the supply side, the mining sector rebounded, driven mainly by the recovery in natural gas output, while growth in the manufacturing sector improved marginally on better performances in the domestic-oriented industries.
The services sector continued to expand amid sustained growth in the wholesale and retail trade sub-sector. On a quarter-on-quarter seasonally-adjusted basis, the economy grew by 1%.
Amid unresolved trade tensions that pose a multitude of challenges, risks and opportunities, the central bank said protracted trade disputes may have significant structural implications.
These include subdued global growth, high financial volatility and investor uncertainty, and reconfiguration of global value chains, it said.
For the first-half of 2019 (1H19), Malaysia’s economic growth came in at 4.7%, following a 4.5% growth recorded in 1Q19.
“That’s why we are very comfortable with the range of 4.3% to 4.8% (for the year) we have forecast earlier in the year, and that’s something we are maintaining,” BNM governor Datuk Nor Shamsiah Mohd Yunus said at a briefing in Kuala Lumpur today.
On the possibility of a recession following the recent US yield curve inversion, Nor Shamsiah said global growth is unlikely to enter negative territory as it did during the 2008 global financial crisis.
Meanwhile, BNM has had “very positive engagements” with FTSE Russell ahead of the index provider’s review of Malaysian government bonds next month that could see local bonds being dropped from FTSE Russell’s World Government Bond Index.
“They were very appreciative of the measures we have put in place to deepen the onshore market, so that real money investors have the required access to hedging onshore.
“They have also engaged with investors and investors have given them the same feedback,” Nor Shamsiah said.
Recently, BNM had introduced several new initiatives to enhance market accessibility and liquidity, including enhancing repo market liquidity and flexibility and enhancing the delivery mechanism for Malaysian Government Securities (MGS) futures settlements.
The central bank also announced four new initiatives to further enhance market accessibility, as well as foreign exchange administration (FEA) liberalisation measures to support business efficiency.