During the third quarter of 2018, Malaysia’s economy is probably growing fast, amidst a spike in private spending especially during the period of consumption tax holiday. According to a poll on the median forecast from 15 economists for Malaysia’s gross domestic product (GDP) showed that it has grown by 4.6% year-on-year between July and September. It has been compared with the growth for the earlier quarter when it was 4.5% year-on-year.
Bank Negara is due to divulge the nation’s third-quarter 2018 GDP performance on 16th November. In one note, the brokerage wrote that the suppressed demand during the devouring tax-free period was the bright side for the third quarter of 2018s GDP growth although the bad situation from commodities expanded. It even stated that generally one can expect the GDP growth to improve by 4.6% y-o-y for the third quarter of the year.
Another research company stated that the GDP growth for the three months till September would probably have sped on agreeable base effect. It has been pointed that the growth would be privately-led, backed by reliable private investment amidst volatile consumer pay out on the back of the tax-holiday period. It has been even added that regardless of poor mining result, one can think that the third quarter of 2018 GDP would remain volatile hypothesized on the benign third quarter of 2017 trade and manufacturing data.
Mirroring similar views, Standard Chartered stated private consumption was active regardless of the reintroduction of the sales and service tax on 1ST September and replacing the goods and service tax. The GST was annulled on 1ST June. The bank commented that the abolishing of the GST might have bolstered private spending for the months of July to August. However, the GDD growth has been influenced by weak crude oil production and natural gas production.
It has been assumed that Malaysia’s GDP growth for the third quarter would probably have slowed down to 4.2% y-o-y, being the lowest in nine quarters, regardless of strong private consumption.