“Consumer sentiment remains weak after the implementation of the Goods and Services Tax on April 1, and it will likely continue to distort consumer spending for the quarter under review”.
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“Although the economy is facing a considerable number of shocks, it has remained resilient as reflected by the steady growth performance of our economy”, Bank Negara Malaysia Governor Zeti Akhtar Aziz told a news conference.
Malaysia’s economy expanded 4.7% in the third quarter ended Sept 30, 2015, underpinned by the services and manufacturing sectors, which was in line with forecasts. “Growth should pick up in the final quarter as domestic demand and export growth strengthen”.
The department said in the third quarter, the capital account posted a net outflow of RM30 million compared to RM1.1 billion in the previous quarter, attributed to lower net payments on non-produced, non-financial assets outflow by RM1.1 billion.
The ringgit has been Asia’s worst performing currency this year, losing nearly 20 per cent. The ringgit stayed flat, ranging between 4.3770-4.3820 after the GDP data was released.
Meanwhile, Malaysia’s central bank said the private sector remained “the anchor of growth” for the economy in its third quarter.
For the three quarters of 2015, GDP posted a growth of 5.1% with a value of RM853bil at current and RM784.9bil at constant prices.
The ringgit remains “significantly undervalued” and risks to economic expansion are unlikely to materialise with exports still strong, Zeti said in an interview this week. Domestic private sector demand rose 4.4%. The currency may recover when the US Federal Reserve normalises interest rates and as “domestic issues” in Malaysia are resolved, she said. Global funds have pulled about 33.6 billion ringgit (S$10.9 billion) from Malaysian stocks and debt this year.
“Inflation is projected to peak in the first quarter next year and moderate thereafter”, she said, adding that the ringgit saw temporary appreciation of 3.3 per cent in October”, she said.
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Investor sentiment has been hurt by alleged graft and mismanagement at state investor 1Malaysia Development Berhad (1MDB).
