Tue06192018

LAST_UPDATETue, 19 Jun 2018 12am

Here's What Deutsche Bank Research Has To Say About Malaysia's Economy In The Lead Up To GE14

As Malaysia is inching closer to the 14th General Election (GE14), a report by Deutsche Bank Research expects a high economic growth for the country.

This growth is expected to be driven by domestic demand as the report dated April 12 expects the acceleration in both consumption and investments thanks to the more intense election campaigning.

Apart from the election campaigns, domestic consumption is also expected to rise due to the increase in BR1M payout that were promised by Barisan Nasional in their GE14 manifesto.

“PM Najib announced on April 7 that cash payouts under the 1Malaysia People's Aid (BR1M) program will be doubled for H2, along with further broad-basing of the subsidy from the existing one-third of the working age population.

“Our calculations suggest the disbursement is likely to rise to 0.7% of GDP from 0.4% earlier. Given the details involved, the 2019 payout is likely to rise further,” the report reads.

Deutsche Bank Research also found that the improving property market is also benefiting private investments.

“At the same time, private investments have been benefitting from an improving property market, with construction activity strengthening, as indicated by capital goods imports remaining elevated at 17% in the three months to February.”

But the most eye-catching prospect is the expected rise in wages as the report noted that the lagged impact of the recent strong growth, higher oil prices and equity value are also feeding through.

-mD