Xinhua, Kuala Lumpur: Malaysian economists have maintained Malaysia’s full-year growth forecast at 4.7 percent as they foresee the government’s recent stimulus measures will support the country’s economy.
Maybank Investment Bank Research said on Friday that measures to stimulate the domestic economy have been rolled out with the central bank lowering the country’s interest rate and the government reviving some major infrastructure and development projects.
The local research house estimated the central bank’s 25 basis points overnight policy rate cut recently would boost 0.3 percentage point of the country’s private consumption, and 0.1 percentage point of its gross domestic product (GDP) growth.
With construction having a multiplier of 2.03 times, the highest among all economic sectors, it believed the revival of major infrastructure projects and 14 billion ringgit (3.35 billion U.S. dollars) worth of government development spending projects are positive for growth.
Malaysia’s central bank announced on Thursday that its GDP growth moderated to 4.5 percent in the first quarter from 4.7 percent in the fourth quarter last year, driven by domestic demand. The bank has maintained its full-year growth target at 4.3 percent to 4.8 percent this year.
CGS-CIMB Research believed there are sufficient catalysts for Malaysia to achieve GDP growth of 4.7 percent this year, as the transitory drag from public investments is expected to abate amid the conclusion of public sector project reviews and revival of megaprojects.
“The strong pipeline of investment approvals last year could still manifest as the domestic policy landscape settles down. In addition, a recovery in mining output remains on track for the second half,” said the local research house.