Skyline of Kuala Lumpur (Source :internet) Kuala Lumpur (VNA) – The Central Bank of Malaysia has forecasted the economy to falter in 2016, as the country has been navigating a challenging economic environment, driven by the global economic and financial situation.
In its annual report released on March 23, the bank said that the country’s gross domestic product is expected to grow at 4-4.5 percent, weighed by domestic demand which is believed to rise 4.3 percent compared to last year’s figure of 5.1 percent.
Although a slight fall will be seen in prices of commodities, export activities will achieve upbeat signs thanks to improvement in foreign markets, the bank said. It also expects the trade balance for 2016 to remain in surplus, albeit lower at 79.5 billion ringgit (19.91 billion USD) from 94.6 billion ringgit (23.45 billion USD) in 2015.
Meanwhile, inflation is predicted to edge higher in 2016 to between 2.5 and 3.5 percent compared to 2.1 percent last year, due to an increase in prices of some items and a weak ringgit.
Malaysia’s economy expanded 5 percent last year, while foreign debts stood at 192.2 billion USD (72.1 percent of GDP) by the end of the year, which stemmed from ringgit devaluation.
Being a highly open economy, Malaysia cannot elude risks and instability brought about by external factors. However, Malaysia has proved its capacity to deal with the challenges through flexible mechanisms, set financial stepping stones, as well as powerful policies.
By February 29, 2016, foreign exchange reserves at the central bank were calculated at 95.6 billion USD.-VNA
