HSBC: Malaysia's GDP to grow at 3.6% in 2016

Malaysia's gross domestic product (GDP) growth this year is projected to be at 3.6 per cent versus the estimated 4.7 per cent for 2015, said HSBC Bank (M) Bhd.

HSBC Asean Economist, Lim Su Sian, said weak export figures, lower oil prices and the slow domestic consumption would affect the GDP.

"The severe slump in oil prices will pressure the country's exports and current account and these will be reflected in the GDP," she told a media briefing on the economic and foreign exchange outlook 2016.

She said regionally, Singapore GDP's growth was expected to be at 1.8 per cent in 2016 compared with 2.1 per cent last year, while Indonesia's and India's GDP growth was estimated to be stagnant and maintained at last year's level.

Lim said the net export contribution to the GDP growth would come slightly under pressure because of the weak external environment.

"On the corporate sector, businesses will naturally follow the trend and based on the capital outlays and investments by corporate sector, we expect it to see some moderation and expansion will also not be as rapid as the previous year simply because the level of demand is not there," she said.

On the government's financial position, Lim said, the budget recalibration next week was realistic with the current global economy.

"The government has come under pressure in recent years to improve the budget base on development infrastructure cut," she said.

On the budget deficit target for this year, she said, there was a risk of slippage in achieving it mainly due to external environment which was beyond the government's control.