Malaysia’s economic growth momentum is expected to stabilise in 2017, on the back of resilient domestic demand and improving prospects for external demand, says RAM Ratings Services Bhd.
In a statement today, RAM Ratings projected gross domestic product growth of 4.5% in 2017, slightly better than 4.2% expected this year.
“The marginal improvement in Malaysia’s expected growth trajectory remains supported by resilient domestic demand,” it said.
However, the broad-based recovery in business and consumer sentiment was not widely envisaged next year as sales of durable goods had yet to show sustained momentum and the lack of any impetus for businesses to expand capacity, it said.
“Nonetheless, private consumption should still be buoyed by demand for basic necessities and a normalisation of labour market conditions. Growth in this area is projected to reach six per cent in 2017,” it said.
The rating agency said private investment growth will remain supported by big-ticket infrastructure projects and was anticipated to clock in at 5.5% next year despite lacklustre capacity-building activities.
As for the external factor, RAM Ratings said, there were indications of a strengthening US economy and China’s steadfast structural rebalancing.
“That said, the prevailing uncertainties vis-à-vis the commencement of ‘British exit’ talks and the impact this may have on European businesses, the US’ trade strategy under a new administration and the lingering uncertainties over global oil prices will still pose crucial downside risks to RAM Ratings’ forecasts for next year,” it added.