KUALA LUMPUR, FEB 7 – Malaysia’s economy is expected to grow 4.2% this year in exports supported by recovering commodity price, demand recovery in electronics and crude oil prices.
OCBC Bank Economist, Wellian Wiranto notes that in Malaysia, recovering commodity prices have been offering the economy some support. It also occurs at a time when domestic consumption has stayed encouragingly robust due to helpful employment and wage trajectories.
“Global crude oil prices will recover to US$65 per barrel by this year, supported by the production of the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC.” he says at the 2017 Economic Outlook in Kuala Lumpur last week.
According to the regional financial institution, global oil prices appeared to have found some footing with the OPEC production cut deals holding up thus far.
The rebound in crude oil prices was expected to support the ringgit's exchange rate and Malaysia's economy.
"Since oil price slump of previous years was one factor affecting the ringgit's exchange rate, it is logical yo expect the same pattern to hold on the flip side now that oil price is recovering," Wiranto adds.
He points out that in tandem with recovering oil prices, other commodity prices had also moved higher. This should provide added stability for Asia.
"In Malaysia, for instance, the recovering commodity prices have been offering the economy some support. It also occurs at a time when domestic consumption has stayed encouragingly robust due to helpful employment and wage trajectories.
“On the external front, we have also seen an uptick in export numbers that are helped by the commodity rebound as well as a pick-up in electronics exports," he adds.