GDP growth is a very good barometer for the property market. Especially so for the major cities here in Malaysia. Would anyone dare to buy KL properties if the economy is in negative zone? Well, 2016 is going to be ‘slower’ year for Malaysia according to AffinHwang Capital Research. As per reported in NST, it is revising its growth outlook for Malaysia downwards, from 4.5 percent to 4.2 percent for 2016. Major reason stated is a SLOWING WORLD economy and slower semiconductor sales. One major cause, the slowing of exports for electrical and electronic goods which is actually 36 percent of total exports. For 2017, GDP growth will be higher, at 4.4 percent.
Current account surplus will continue and remains SUBSTANTIAL at about RM250 billion or 2.1 per cent of GDP in 2016 compared with RM34.7 billion or 3 per cent of GDP in 2015. Do note that there are many advanced nations where there has been no account surplus for many years. The expectations from AffinHwang economists, Alan Tan and Lim Yee Ping for the Overnight Policy Rate (OPR) is that it should be maintained at 3 percent. The potential cut would be the reserve requirement (SRR) should the external environment deteriorates. It expects the inflation rate to be manageable at 2.5 per cent for 2016. Happy following and understanding.
written on 19 July 2016
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