Malaysia's growth during the third quarter of this year is expected to have been propelled by private consumption, chief economist at Bank Islam Malaysia, Dr. Mohd Afzanizam Abdul Rashid said.
According to The Malaysian Reserve, private consumption will allow for Q3 gross domestic product (GDP) to reach 4.3 percent. This particular economic driver has been growing at a stable pace since the second quarter of last year.
Aside from increased activity among private consumers, growth in the third quarter is also expected to have been supported by a steady rise in retail sales. The news came amid increasing uncertainties in the global economy.
Furthermore, low jobless rates during August are expected to help drive up GDP figures. However, a downtrend in consumer sentiment may stall growth in the country as the government is still working on fixing the problems left behind by the previous government.
According to the latest data from the Malaysian Institute of Economic Research (MIER), consumer sentiment in the country slumped from 93 points to 83 points on the sentiment index.
In general, consumers are starting to be less optimistic about the Malaysian economy, the MIER survey suggested. Analysts are expecting sentiment to further drop during the fourth quarter.
Another point of concern for investors and local consumers is the slump in exports for September. Nikkei Asian Review reported that exports only reached $18.72 billion - a figure that is 6.8 percent lower than the same month in 2018.
The said export slump is even bigger than the 0.8 percent decline in August. Industry experts said the weakening in exports stemmed from the plummeting behavior of commodity exports and electronic products.
On the other hand, economists noted that Malaysia isn't the only country that experienced a slump in exports. Other countries in the Asia-Pacific region, including Singapore and Taiwan, also saw a decline in the sector.
Despite revived fears for the fate of the Malaysian economy, there is increasing optimism in the country's palm oil plantation sector. So far, experts have forecasted higher crude palm oil (CPO) prices in H1 2020.
The Public Investment Bank Bhd (PublicInvest), noted that industry analysts are more optimistic about CPO prices due largely to weaker demand. When there is slow demand in global markets, prices can go up.
Growth in the palm oil sector is expected to be driven by local consumption, especially in the palm-biofuel segment. The country has been working to revamp its traditional palm oil sector due to increasing scrutiny from environmental advocates.
