A view of Kuala Lumpur capital city of Malaysia (Photo: AFP) Kuala Lumpur (VNA)- Malaysia could be one of the three countries in Asia which are the mostnegatively affected by the trade war between the US and China if the dispute continueto worsen, according to Standard Chartered.
EdwardLee, the bank’s chief economist for the Association of Southeast Asian Nations(ASEAN) and South Asia, warned that the trade dispute between the US and China couldfurther weaken Malaysia’s economic performance, which has already beenmoderating in recent times.
Accordingto the economist, Malaysia’s gross domestic product (GDP) grew weaker thanexpected at 4.9 percent in the first half of 2018 due to supply-sidedisruptions, apart from the technical “high base” effect.
Ifthe US goes ahead with the 25 percent tariff on the next 200 billion USD worthof Chinese imports plus the previous 25 percent on 50 billion USD worth ofimports from China, the potential impact on China’s growth could be 0.6percentage points and that is massive.
This could result in a 0.3percentage point impact on Malaysia’s GDP growth, The Star quoted Lee as sayingat a media briefing on September 4.
Asfor the economic performance in the second half of 2018, Lee did not discount apotentially slower growth for Malaysia, given the rising external headwinds,moderation in growth drivers such as investment and government spending as wellas negative trade sentiment.
Consideringthe key risks facing the domestic economy, Standard Chartered has slashed itseconomic growth forecast for Malaysia in 2018 to 4.8 percent, down from itsearlier forecast of 5.3 percent.
Onthe ringgit, Standard Chartered foreign exchange strategist for ASEAN and SouthAsia Divya Devesh expects the local currency to trade at RM4 per US dollar bythe end of 2018 and at RM4.10 per US dollar by the end of 2019.-VNA
VNA
