Malaysia

Despite an uncertain international climate, Malaysia is set to put in another strong economic performance this year. While growth is not expected to hit the heights achieved in recent years, a rate of 4-5% will serve to keep Malaysia on the right track.

Malaysia’s capital markets are in line for a boost, as the introduction of private pension funds is expected to create a significant funding inflow that will be directed towards various investment vehicles. This should also serve to take some of the pressure off the state’s retirement schemes.

With data use growing strongly and existing capacity under pressure, Malaysia’s broadband network is undergoing necessary expansion to keep up with demand. Indeed, as penetration growth slows, improving speeds and service quality have become a priority.

Recent efforts to upgrade Malaysia’s agricultural sector that include increased incentives for farmers to learn new techniques and adopt advanced technology are expected to lead to greater harvest yields and help meet rising domestic demand for food products.

Healthy domestic demand is expected to drive growth in Malaysia’s banking sector this year as public projects help to stimulate lending. While international factors mean banks may take a more cautious outlook, the system as a whole is well capitalised and soundly managed, standing it in good stead for the future.

Malaysian officials are confident the country’s manufacturing sector will continue to post strong growth throughout this year and beyond, on the back of an increasing swell of both foreign and domestic investment. There are some suggestions, however, that a general slowing of the global economy and the prospect of sharp wage increases could take some of the momentum from industrial expansion.