Full year 2016 GDP is expected to be at 4.2 percent

Malaysia's economy is expected to grow at 4.2 percent for the full year of 2016 based on the economic performance for the past few months.

Since November 2016, the country's economy has stabilised after it recorded a 4.3 percent growth in the third quarter.

“Based on the signs and indicators in November and third quarter, it showed that the economy is stabilising.

"Considering all the data including export and industrial output data, Malaysia is expected to record a strong fourth quarter growth.

“The details of GDP will be released next week and our forecast is 4.2 to 4.4 percent. For full year of 2016, economy is expected to be at 4.2 percent," said UOB Bank Economist, Julia Goh.

She said for this year, the economy is expected to grow at 4.5 percent, subjected to external factors including President Donald Trump’s economic policies.

Despite the positive projection, Julia said that people still feel disconnected from the real economy especially in terms of living costs.

“Cost of living escalated fast along with the depreciation of ringgit and business sentiment is not really good either.

“They are worried about Trump’s trade policies, China recorded slower growth, and geopolitical risks. Even the crude oil price has recovered a bit but it is still fragile and of course the main concern is cost of living,” she said.

Julia said that the country’s export showed positive recovery signs and subsequently will be translated into GDP growth for the full year.

Meanwhile, Julia said that Trump’s policies towards China are expected to have an impact to our export provided it escalate quickly.

“For Malaysia and Asia, the main concern is whether his policies will trigger trade war between the USA and China because both of them are our largest trade partner.

“Of course there will be a negative impact, but as for now, we are still waiting for tax reform by the US which will trigger an outflow from developing nations and lead to weaker currencies,” she added.