"We expect private consumption to be the primary anchor of Malaysia’s growth for next year as well as a return of positive contribution in terms of trade and investment, although the performance will still be relatively subdued given the uncertainties around global growth and economic activities,” lead economist for macroeconomics, trade and investment Dr Richard Record said.
Further, there is also an anticipation on the acceleration of public investment sector over time following the government’s revision of mega-infrastructure projects, he said at the launch of the 21st edition of the Malaysia Economic Monitor titled: Making Ends Meet, here today.
The report has also revealed that slowing income growth among lower-income households and younger workers contributed to perceptions of being ‘left behind’.
Although median incomes continue to outpace inflation, income growth rates for low-income Malaysians slowed between 2014 and 2016.
Additionally, wage growth for younger and less-educated workers has been sluggish, persistently trailing earnings of older and better-educated workers.
Further on forecast, World Bank Group has revised downward Malaysia’s gross domestic product (GDP) from 4.6 per cent to 4.5 per cent next year largely due to weaker than expected private investment and export growth at 0.3 per cent and 1.4 per cent respectively in the third-quarter (Q3) this year.
Overall investment activity is targeted to expand at 1.4 per cent next year as subdued trade prospects and increased uncertainty weighed on business confidence and investment intentions.
“Exports of manufactured goods declined, led by a considerable fall in electric and electronic exports. Commodities exports also declined due to a large contraction,”
The report highlighted varying purchasing power in different parts of the country, poor financial planning, household indebtedness and unaffordable housing as other key factors affecting living costs.
Domestic Trade and Consumer Affairs Minister Datuk Seri Saifuddin Nasution Ismail said the cost of living is a concern, extending beyond prices.
“Those on lower wages spend their income to pay essentials like rent, transportation and food. At the end of the day, the find not much is left for the month.
“The challenge for policymakers is that different solutions are needed to cater to different groups with different needs,” he said.
Record said the current consumer price index (CPI) was still low at 1.3 per cent in Q3 of 2019 and thus the inflation in the country to remain fairly muted next year.
“Perhaps, we see stability in commodity prices such as in oil and gas prices,” he said.