KUALA LUMPUR: The World Bank has estimated that Malaysia will record a gross domestic product growth of 4.7% in 2019.
Its lead economist, Richard Record, said that the country’s fundamentals are sound.
However, he cautioned that Malaysia would face external headwinds which could result in lower exports and a cutback in public expenditure.
“The World Bank is positive on the measures taken by the new government to strengthen the economy,” he said in a presentation here today.
He said private consumption would continue to be the main driver of growth but would expand at a more measured pace.
Household spending meanwhile will be buoyed by stable labour market conditions and income support measures such as the Cost of Living Allowance.
Record said gross fixed capital formation or investment is expected to increase slightly, driven by the private sector, while public investment will remain subdued.
He added that the external sector may be negatively affected by heightened uncertainty on the global front, brought about by the trade impasse between the US and China.
The fiscal deficit is expected to narrow to 3.4% due to the government’s austerity drive, and subsequently to 3% in 2020.
The economy is expected to chart a growth of 4.6% in 2024. The World Bank is optimistic that Malaysia will become a high-income nation by 2024.