RAM revises Malaysia’s economic growth forecast to 5.2pct

KUALA LUMPUR: RAM Ratings Services Bhd has revised upward its forecast on Malaysia’s economic growth this year to 5.2 per cent from 4.5 per cent originally.

This follows a strong expansion in the first quarter as the economy starts to show signs of recovery.

After a better-than-expected growth performance of 5.6 per cent in the first quarter of the year, the economic recovery momentum is beginning to show signs of sustainability.

Most of this upside stems from a positive turnaround in business sentiment, which has brought about more productive capacity building in the form of machinery and equipment investments, it said in a statement today.

A significant rebound in external demand has also supported this robust growth and, in part, has been a key driver of higher business confidence exhibited by export-oriented firms, in line with RAM’s Business Confidence Index findings.

RAM has also increased its inflation expectations for 2017 to 3.8 per cent from 3.0 per cent on the back of a stronger-than-expected oil price recovery momentum in the first quarter and upward stickiness of food prices, especially food away from home.

Source: Malaysian Trades Union Congress