Malaysia s Q--- real GDP grew by -.- y-o-y, reflecting the econo- my s slowest growth rate in nine quarters. We maintain our forecasts for ---- and ---- real GDP growth to come in at -.- and -.- re- spectively, as we expect both the domestic and external sectors to face continued headwinds over the coming quarters. ...Mining and quarrying activities also moderated, coming in at -.- y-o-y (from -.- in the previous quarter). The outper- formance of the manufacturing sector was likely due to the ef- fects of a significantly weaker currency (with the MYR having lost approximately --.- of its value since July ----), which improved the competitiveness of Malaysian exports. However, exports are unlikely to be able to maintain their competitive edge over the coming quarters as we believe that the ringgit is significantly oversold and due for a rebound (see Regional ...The outper- formance of the manufacturing sector was likely due to the ef- fects of a significantly weaker currency (with the MYR having lost approximately --.- of its value since July ----), which improved the competitiveness of Malaysian exports. However, exports are unlikely to be able to maintain their competitive edge over the coming quarters as we believe that the ringgit is significantly oversold and due for a rebound (see Regional
...Private Consumption Outlook: At approximately -- , private consumption comprises a fairly large share of Malaysia s GDP in comparison to other developing markets. Given our forecast for private consumption growth to outpace headline real GDP growth over the long term, we expect private consumption s share of the economy to slowly rise to --.- over the next -- years. ...We expect this proportion to fall slightly over the long term as the government actively seeks to balance its budget through the curtailment of expenditure as well as through reducing govern- ment subsidies. Fixed Investment Outlook: Investment as a share of the economy will likely remain fairly constant over the next ten years as the government continues to invest in infrastructure as part of the its economic development plans. We forecast it to rise to --.- in the next ten years, versus --.- in ----. ...Malay- sia s net export position is also positive, which contributes to its modest external surpluses. We believe that the shift away from export-led growth will lead to a gradual decline in Malaysia s trade surplus over the long term, but expect the current account -- Business Monitor International Ltd www.bmiresearch.com
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