Macro Forum: The Street View


GDP grew at its slowest pace for two years in the July-September quarter, year-on-year growth dropping to 4.4% from 4.5%, a fourth consecutive quarter of slowing growth. Declining production of natural gas and weak crude palm oil production took up to 0.7% of GDP growth out of the economy. This offset the positive performance elsewhere where household spending increased by 9% and private spending by 6.9%.

Manufacturing performance slowed for a fourth consecutive month in December, the Malaysia Manufacturing PMI dropping to 46.8 from 48.2 in November, the lowest rate since the start of the survey in 2012. Slowing global demand from Europe and Asia Pacific reduced purchasing activity, putting pressure on local supply chains. Performance was impacted also by slowing employment growth after six months of job creation.

The current account surplus reduced to 3.8bn ringgit as exports rose 6.7% in September from a year earlier, after dropping by 0.3% the previous month. The trade surplus fell 4.1% year-on-year to 25.2bn ringgit, a decline on the previous quarter that showed a 12.9% rise.

Inflation steadied in December at 0.2% year-on-year, no change on the previous month. The Central Bank had indicated in its meeting in November that inflation may increase next year but for the moment is expected to keep its key interest rate unchanged.

The Malaysian Stock Market fell by 5.91% over the course of 2018. The Ringgit depreciated by 2.8% against the US dollar over the same period.


Real GDP Growth

Source: International Monetary Fund

Malaysia FX vs FV

Source: Bloomberg Spot Prices and Actis methodology for Fundamental Value


Source: International Monetary Fund


Ali Mazanderani

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