Strong Q2 GDP for Malaysia Despite Cloudy Trade Risks Outlook
Malaysia Recorded a Strong Gross Domestic Product (GDP) Growth in Q2 This Year
Malaysia’s Q2 GDP grew faster than expected between April to June this year. This makes it the first Southeast Asian country to record accelerated growth.
Spurred mainly by palm oil production and strong consumer spending, GDP grew 4.9% from the previous quarter. This beat out Reuters’ 4.8% forecast, and overtook the 1Q’s 4.5% growth rate.
Malaysia’s Q2 GDP growth was a stark contrast against other nations in the region, whose economies slowed this year. Neighbours Singapore, Indonesia and the Philippines reported weak growth numbers in Q2 compared to Q1.
The slowdown was attributed to the US-China trade way, which has put a dent in demand for exports. However, Malaysia is not out of the woods yet. Analysts are still predicting challenges ahead of increase global risks.
Growth for this year in Malaysia is still expected to fall within the central bank’s 4.3-4.8% forecasted range. However, rising global trade tensions could affect the growth by 0.1%. In a pre-emptive move, the central bank cut interest rates in May. Disputes between China and US however, remain a concern. In the first half of 2019, the country experienced a decline in exports by 0.2%.
Despite the optimistic results posted in Malaysia’s Q2 GDP growth, the central bank is predicting further slowdown over the coming quarters. At the moment, the central bank is assessing possible further rate cuts against the risk of inflation and domestic growth. Being a large exporter of intermediary goods between China, the US-China trade war is a concern.