GEORGE TOWN: Finance Minister Lim Guan Eng says Malaysia’s economic growth is expected to plateau at 4.5% of the GDP in the second quarter, continuing at the same rate of growth experienced in the first quarter.
He was responding to reports that Singapore’s economy contracted 3.3% in the second quarter of 2019.
Singapore’s trade ministry had cited the US-China trade war, slowing growth in China, Brexit, the Japan-Korea trade dispute and the unrest in Hong Kong as some of the reasons behind the slowdown, Reuters reported.
Lim said Malaysia’s economy, too, is determined by external factors over domestic factors.
“This is the reality we have to accept, and our challenge is to come up with a package to counter the effects of the US-China trade war.
“Look at the effects of the trade war, with Singapore’s economy contracting by 3.3% in the second quarter. I am confident that Malaysia will not become like Singapore and contract up to 3.3%,” he said in a tax forum at the Penang Chinese Chambers of Commerce last night.
Lim said GDP numbers alone would not help Malaysia steer clear of troubled waters during the trade war. The only way to do so would be to attract more foreign investments, he added.
He said the US had brought in RM11.1 billion through the manufacturing sector in the first quarter of the year, an “amazing” feat as such figures would normally take a year to achieve.
“China, during the same quarter, was RM4.4 billion. Before this it was just RM1 billion. I believe the numbers can rise further to RM10 billion, as China is Malaysia’s largest trading partner,” he said.
Lim also said he would be leading a delegation to Shenzhen next week to attract more Chinese investments to Malaysia.
Bank Negara Malaysia had forecast economic growth of between 4.3% and 4.8% this year, boosted by private consumption growth and private sector activity.