Bank Negara Expects Malaysia Growth To Improve This Year

Malaysia’s economy may expand at a faster pace this year, thanks to the recovery in global commodity prices and the continued growth of domestic demand, the country’s central bank said Thursday.

The Malaysian economy is projected to register sustained growth of 4.3-4.8 percent this year, Bank Negara Malaysia said in its annual report.

The country’s economic growth slowed to 4.2 percent in 2016 from 5 percent in the previous year.

Domestic demand will continue to be the principal driver of growth, underpinned by private sector activity, the bank said. Continued wage growth and the increase in disposable income are expected to underpin private consumption growth.

Meanwhile, investment growth is projected to remain modest amid cautious business sentiment and continued uncertainty in the economy.

Headline inflation was forecast to average higher in the range of 3-4.0 percent this year, given the prospect of higher global commodity and energy prices, and the impact of the depreciation of the ringgit exchange rate, the report said.

Core inflation is likely to increase modestly due to cost-push factors that are not expected to cause significant spillover to broader price trends due to stable domestic demand conditions.

The bank forecast a current account surplus of 1-2 percent of gross national income for this year.

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