Malaysia: Lacklustre growth even as consumer continues to spend – Standard Chartered

Analysts at Standard Chartered note that Malaysia’s Q3 GDP growth moderated to 4.4% y/y from 4.9% in Q2.

Key Quotes

“While the print was in line with our expectations, sequential growth slowed below 1% to register 0.9% q/q seasonally adjusted. This is the third consecutive quarter of lacklustre growth. Quarterly expansion has averaged c.1% q/q (seasonally adjusted) so far in 2019, versus an average 1.3% from 2012-18.”

“Private consumption remained relatively resilient. Even with a high base effect (due to the consumption tax changes), private spending rose 7% y/y, slightly below the average 7.1% expansion from 2012-18.”

“Looking to 2020, a potential bottoming out (but no strong recovery) of global growth may improve onshore growth sentiment. We estimate that the Malaysian economy may run close to zero potential growth in 2020. However, downside risks remain and could turn the output gap negative.”