Malaysia's Q4 economic growth slumps to decade-low of 3.6%, virus to hit Q1
12 February, 2020
Malaysia's economy grew 3.6 per cent within the fourth quarter from a year earlier, the slowest pace during a decade, thanks to lower output of vegetable oil , petroleum and gas , and a fall in exports amid the US-China trade war.
The coronavirus outbreak in China will put further pressure on the economy this year, particularly within the half-moon , the financial institution said on Wednesday (Feb 12) after releasing the info .
The Malaysian government, which has forecast the economy to grow at 4.8 per cent this year, is already performing on a stimulus package for aviation, retail and tourism due to the epidemic in its biggest trading partner.
The pace of expansion in October-December was well below the 4.2 per cent rise forecast by analysts during a Reuters poll, and slower than 4.4 per cent within the third quarter.
Full-year growth came in at 4.3 per cent, below the government's forecast of 4.7 per cent and therefore the weakest since 2016.
"The economy remains being supported by very firm private sector spending, which may be a positive development in our economy. More importantly, private investment might rotate ," Bank Negara Malaysia (BNM) Governor Nor Shamsiah Mohd Yunus told a press conference .
"But there are downside risks. it's extremely difficult to predict how long it'll take before (the virus) is contained ... there are numerous moving parts, but we do acknowledge it'll impact us within the half-moon ."
BNM said exchange rate volatility should be expected this year.
Malaysia's economy, like many in Asia, came under heavy pressure last year from the escalating Sino-US trade war and softening global demand. The mining sector was particularly hard hit, and BNM responded with a preemptive move its benchmark rate of interest in January.
While China and therefore the us agreed a preliminary deal last month, the fast-spreading epidemic has raised fresh global growth risks and heightened expectations of more stimulus in a number of the more vulnerable economies.
Demand in China has slumped because the outbreak causes widespread business disruptions, and global tourism visits by mainland Chinese are down sharply as Beijing looks to contain the spread of the virus.
"The stimulus package will comprise of variety of measures. we've to seem at the foremost optimum policy mix that might the support private sector, but at an equivalent time ensure fiscal sustainability of the govt continues to be sustained," Nor Shamsiah Mohd said.
BNM said headline inflation in 2020 is predicted to average above in 2019, but remain modest.
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