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Monthly Review: Escalating geopolitical risks fuel market volatility

Fixed-Income Views /

Domestic consumption remained resilient, while the softer decline in exports together with better-than-expected economic performance and stable industrial production growth in China may indicate a potential rebound in Malaysia’s manufacturing sector. The escalating geopolitical conflicts in the Middle East have led to higher oil prices, reignited concerns about inflation, and heightened overall economic uncertainties. Despite […]

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Oil price outlook: MARC Ratings anticipates higher prices

Economic Views /

The worldwide energy landscape is currently experiencing a complex interplay of factors that are shaping the oil market’s near-term price outlook. Amid ongoing geopolitical conflicts in Eastern Europe and the Middle East, supply disruptions, expectations of steady global gross domestic product (GDP) growth in 2024, and the persistence of medium-term oil dependency despite evolving environmental

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Budget 2024: Reforms on the horizon, further fiscal consolidation would be beneficial

Economic Views /

On October 13, 2023, the Malaysian government tabled its Budget for 2024, the largest on record with an allocation of RM393.8 billion (Budget 2023: RM388.1 billion), albeit slightly lower than the spending amount for 2023 estimated at RM397.1 billion. The government has allocated for a higher operating expenditure of RM303.8 billion (2023 estimate: RM300.1 billion),

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Recommendations on Malaysia’s ongoing development of wage policies

Economic Views /

Malaysia continues to maintain its policy commitment to worker welfare, through its ongoing review of wage policies. In July 2023, Malaysia increased the minimum wage from RM1,200 to RM1,500, extending its applicability to micro-enterprises with a staff size of less than five. The minimum wage of RM1,500 was already in effect since May 2022 for

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Monthly Review: Global risk-off sentiment drives local yield upsurge

Fixed-Income Views /

The latest economic data for Malaysia were mixed. Wholesale trade and domestic-oriented manufacturing production for July were resilient, consistent with the positive industrial production growth. However, the external sector remained weak as the latest exports for August fell at a steeper pace of 18.6% (July: -13.0%), dragged by softer demand from key trade partners. Going

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GST and other potential anchors to enhance Malaysia’s fiscal position

Economic Views /

Malaysia continues to maintain its long-term commitment of fiscal consolidation to enhance debt sustainability. In terms of the government’s fiscal balance, this has remained largely stable, excluding during the pandemic period. Over the 10-year period from 2013 to 2022, Malaysia’s fiscal deficit averaged 4.2% of gross domestic product (GDP). Excluding the COVID-19 fund, Malaysia’s fiscal

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Monthly Review: Improvement in foreign inflows into Malaysia’s markets

Fixed-Income Views /

Malaysia’s economy registered moderate growth of 2.9% in 2Q2023 (1Q2023: 5.6%), presaged by weaker performance of the external sector. Sustained economic expansion over two consecutive quarters has kept growth on track towards the official year-end gross domestic product (GDP) target of 4%-5%. Private consumption and recovering tourism activities remained key drivers, offsetting the weaker external

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Monthly Review: Monetary policies in transition could lead to bond market volatilities

Fixed-Income Views /

Malaysia’s latest exports in June fell by 14.1% (May: -0.9%), as exports to the US and EU slumped by double-digits of 19.0% and 21.8%. The weaker external sector performance in 2Q2023 reinforced our views of weaker domestic gross domestic product (GDP) growth for the quarter. A sustained trade moderation coupled with higher interest rates in

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Malaysia launches visionary MADANI economic narrative

Economic Views /

On July 27 2023, the Malaysian government launched the visionary MADANI economic narrative, a roadmap to pave the way for sustainable growth. The framework will guide Malaysia’s mission of socioeconomic as well as overarching strategic and tactical plans. From the economic perspective, the MADANI framework is timely in view of the upcoming Budget 2024, New

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