While other Asia Pacific countries including more advanced economies report economic slowdown in Q2 because of the US-China trade war, Malaysia’s economic growth quickened.
The country’s GDP expanded 4.9% year-on-year in the quarter and 4.5% quarter-on-quarter, driven by strong domestic demand and a rebound in commodity prices.
While the country’s neighbor Singapore cuts its full-year growth forecast almost to zero, Hong Kong warns of a possible recession in the current July-September quarter and downgrades the 2019 GDP growth forecast for the year to anywhere between 0 and 1% from the previous estimate of 2-3%.
Both Indonesia and the Philippines also reported weaker Q2 growth.
Malaysia’s central bank cautions that clear downside risks coming primarily from external factors remain on the immediate horizon.
The central bank already cut interest rates in May to pre-empt the weaker global demand as a result of the US-China trade war.
Malaysia expects the full-year growth to fall within the 4.3-4.5% range though the central bank warns that trade war escalation could knock 0.1 percentage point off.