Malaysia’s GDP to expand 4.9% in 2019, says finance minister

This is after January’s consumer prices eased to the lowest in almost a decade, raising concerns that the country is confronting a weak demand or in a recessionary mode.

Malaysia flag Source: Bloomberg

Malaysia’s gross domestic product is predicted to expand 4.9% for this year even as inflationary pressures in the country ease, said the country’s finance minister Lim Guan Eng in a statement on Sunday.

This is after January’s consumer prices eased to the lowest in almost a decade, raising concerns that the country is confronting a weak demand or in a recessionary mode.

‘Strong economic growth numbers, with the economy expanding by 4.7% in 2018, immediately dispels any deflationary fears following the drop in January 2019 consumer price index (CPI) by 0.7%, the lowest in nearly 10 years,’ Mr Lim assured.

January’s fall in CPI was not caused by a recession or any kind of weak demand, Mr Lim said. Mr Lim justified the inflationary adjustment to the replacement of the goods and services tax (GST) with the sales and services tax (SST) and the stabilizing of fuel prices with a ceiling price mechanism.

The adjustment of the policy expands the economic pie to benefit both businesses and the people, he claimed.

For example, the adjustment to the policies have reduced the price of RON95 petrol to be 13% cheaper in January compared to a year ago, Mr Lim said, and that had positively improved the prices of goods and services that are free from GST.

‘The price decline should improve the purchasing power of Malaysian consumers and add to economic growth,’ he said.

The Malaysian economy is healthy, said Mr Lim, basing his view on a recent Nielsen survey which showed consumer confidence results higher than a year ago, as well as recording the highest jump in the confidence scoring among all countries in the survey.

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