KUALA LUMPUR, Malaysia, Feb 24 (NNN-BERNAMA) – Malaysia’s economy is going strong and the gross domestic product (GDP) is expected to expand a further 4.9 percent in 2019.
Finance Minister, Lim Guan Eng, said, the Jan, 2019 Consumer Price Index’s (CPI) decline was not caused by recession or any kind of weak demand.
“Strong economic growth numbers, with the economy expanding by 4.7 percent in 2018, immediately dispels any deflationary fears following the drop in Jan, 2019 CPI by 0.7 percent, the lowest in nearly 10 years.
“The CPI decline proves that the government’s policy of abolishing the Goods & Services Tax (GST) and replacing it with the Sales & Services Tax (SST) and stabilising fuel prices with a ceiling price mechanism works by expanding the economic pie to benefit both businesses and the people,” he said today.
While saying that the Jan price decline was different from the 2009 deflation, he added that, it did not arise from any weakening of demand or economic growth, instead, the decline was largely caused by supply factors in the form of cheaper input cost, specifically cheaper fuel prices
The fuel price stabilisation policy, in particular, passes the savings from cheaper fuel prices directly to consumers while the ceiling price mechanism protected them from high and soaring petrol prices.
“The price decline should improve the purchasing power of Malaysian consumers and add to economic growth.
“The low inflationary environment has encouraged private consumption to grow at a fast pace of 9.0 percent and 8.5 percent, year-on-year, in the third and fourth quarters of last year, respectively,” he added.
Lim also said another proof that the economy was healthy was the fact that the Nielsen survey showed Malaysia’s consumer confidence stood at 118 points in the fourth quarter of 2018, 24 points higher from a year ago.
The jump is the highest among all countries surveyed and it placed Malaysian consumers as the 7th most confident among 64 economies.
Additionally, approved manufacturing foreign direct investments for the first nine months of 2018 rose to RM48.8 billion or 249 percent higher than the same period in 2017.
“These approved investments are expected to create an additional 41,000 quality manufacturing jobs in the next two to three years that can help improve local wages,” he added.– NNN-BERNAMA
