Fitch Group research house sees Malaysian economic growth to ease after a strong Q1-Xinhua

Fitch Group research house sees Malaysian economic growth to ease after a strong Q1

Source: Xinhua

Editor: huaxia

2023-05-16 14:25:15

KUALA LUMPUR, May 16 (Xinhua) -- BMI, a unit of Fitch Solutions, said on Tuesday that it sees Malaysian economic growth to ease over the coming quarters.

The research house said in a note that it has raised its forecast for Malaysia's real gross domestic product (GDP) growth to 4.2 percent in 2023 from 4 percent previously, after the report of the better-than-expected 5.6 percent year-on-year expansion in the first quarter.

That said, its forecasts still imply that growth will slow over the coming quarters, which it thinks will be driven by a slowdown in global demand and tighter credit conditions.

BMI expects Malaysia's private consumption to grow by 5 percent in 2023, easing significantly from 11.3 percent in 2022 due to a decline in household savings and tighter monetary conditions.

The impact of high borrowing costs will also be felt by businesses, which underpins its forecast for investment growth to slow to 2.3 percent of GDP in 2023, from 7.5 percent in 2022.

BMI also expects Malaysia's export growth to slow to 1 percent in 2023 from 12.8 percent in 2022 amid a slowdown in the global economy.

BMI also forecasts that Malaysian government consumption growth will come in at 1 percent for 2023, down from 4.9 percent in 2022.

It said a stronger-than-expected economic rebound in China would bode well for Malaysia's export-oriented economy since China is Malaysia's second largest export destination, accounting for nearly 13 percent of its total outbound shipments.

It also believes China's reopening would help boost Malaysia's tourism sector.

Prior to the COVID-19 pandemic, Chinese visitors accounted for approximately 11.8 percent of international arrivals and the revival of outbound Chinese travelers will benefit Malaysia's services export.