KUALA LUMPUR: Policy makers need to adopt policy measures to support the economy in terms of fiscal policy or monetary policy, amid the external headwinds, said Asean+3 Macroeconomic Research Office (Amro) chief economist Dr Khor Hoe Ee. “Malaysia has negative exports growth for the past six months, and that’s one support for the economy that basically collapsed… So, this means if this situation (exports growth) is persistently declining, the growth is going to be weaker, as well as the aggregate demand is going to be weaker. “
Given the external headwinds, especially because of the China-US trade conflicts, countries in the region, including Malaysia should be more supportive by adopting more expansionary fiscal and monetary policies,” he told a media briefing on the Asean+3 Regional Economic Outlook 2019 here yesterday.
Khor said policy makers do not need to do a lot to keep the economy going, instead they just need to provide more support. “Based on the survey that we did where each country that was in the business cycle turned out most were (those) in the middle of the cycle, which means that growth is potential,” he said, adding that Amro projected that the Malaysian economy to register a 4.5 percent growth this year, the same target it set for 2018.
He said after Malaysians voted in a new government in a shock victory last year, the country’s growth sort of easing off, mostly in terms of investments and exports, but the economy was resilient. “So, if it can uphold itself at this level, then it is good because external headwinds have become worse… But if there is a change, it may be 0.1 percent or 0.2 percent different depending on how the economy responds to the trade tariffs,” he said.
On the region’s growth, Khor said Amro has revised its target a few times from 5.1 percent to 4.9 percent and now 4.7 percent to reflect risks following the escalating trade conflict. On the ringgit, he said the local note is expected to remain range-bound throughout the year, in line with most of the regional currencies. – Bernama
