KUALA LUMPUR: Malaysians are the most pessimistic in the Asean region about the state of affairs in their country.
They were the only ones expecting their domestic political and economic situations to deteriorate over the next six months, a Financial Times Confidential Research survey done in the fourth quarter of last year shows.
One thousand Malaysians were surveyed.
The FT Confidential Research’s Economic Sentiment Index for Malaysia fell 10.6 points quarter-on-quarter to 19 in the fourth quarter, while the Political Sentiment Index slipped 6.1 points over the same period to 22.9.
The survey found that economic sentiment had declined despite recent improvements in the economy.
“We believe this deterioration in sentiment may be attributable to the marked depreciation in the ringgit against the US dollar. The currency has swung wildly against the dollar throughout the year, reaching its strongest level at RM3.80/$ on April 18 before weakening to almost RM4.50/$ by Dec 21 following Donald Trump’s election victory and the US Federal Reserve’s mid-December rate increase.”
The research house expects the Malaysian economy to grow by between 4.4% and 4.7 % in 2017, up from an estimated 4.2% this year.
It said the general election would likely be called in the third quarter of 2017 at the earliest, with the Barisan Nasional likely to win.
“Uncertainty regarding the date of the next general election could be an additional source of pessimism. The election has to be held, constitutionally, by Aug 2018 at the latest, but we believe Prime Minister Najib (Razak) may dissolve parliament as early as the third quarter of next year.”
It also said the Election Commission’s current redelineation exercise would benefit the BN, noting that in the 13th GE in 2013, the opposition won 51% of the popular vote but gained only 37% of seats in parliament.
The research house said: “We expect Najib to win the next general election despite being tainted by the 1Malaysia Development Berhad corruption scandal. A successful redistricting (redelineation) exercise and a divided opposition mean the chances of a change in power are exceedingly low in Malaysia.”
It expects any move by Pakatan Harapan to reach a deal with PAS to avoid dividing the votes against the BN to fail.
FT Confidential Research is an independent research service of the Financial Times. It provides in-depth analysis of China and Southeast Asia.