Private consumption to go up in 2H2018
Emmanuel Samarathisa | 17 Aug 2018 00:30
After four months of uninterrupted selling on Bursa Malaysia, foreign investors have changed their tune towards Malaysian stocks as global funds accumulated net RM458.2 mil of local stocks from Aug 6-10.

But business sentiment might be volatile throughout this year and 2019 due to policy uncertainty brought about by the Pakatan Harapan government, says a market participant.

“We are forecasting a slowdown in gross domestic product (GDP) growth for Malaysia to about 5.1% in 2018, and then slowing further to 4.5% in 2019,” according to Tushar Mohata, head of Malaysia equity research at Nomura, at a recent equities outlook briefing.

Putrajaya is expected to be more frugal with government spending which will be contracting throughout the rest of 2018. “The government will be fiscally more conservative with its operating expenses. Also, export growth which has been strong in 2017 is likely to slow down,” he says.

The fiscal deficit is expected to be at 3% of GDP for 2018, slightly above the government’s 2.8% target. “We feel the revenue shortfall is due to the giving up of the goods and services tax (GST).

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