- ICAEW forcasts Malaysia’s GDP growth to slow to 4% in 2020
- Malaysia’s Property Market to pick up
- MITI urges Malaysian producers to tap Japan’s halal market
- RHB to cease Hong Kong business operations
- Japan unveils US$120b stimulus packages
Malaysia’s 2020 GDP growth may slow to 4%
The Institute of Chartered Accountants in England and Wales (ICAEW) has forecast that Malaysia’s gross domestic product (GDP) in 2020 may slow to 4.0 per cent from 4.4 per cent expected for this year. Economic advisor Sian Fenner said the cautious outlook was primarily driven by the moderating household spending. “Household spending is still going to remain quite healthy but we’re not expecting the 7.0 per cent growth that we have been experiencing,” she told reporters in Kuala Lupur. Fenner said several tailwinds that have supported growth continued to fade, while the effects of the sluggish global environment will start to have a larger impact on the domestic economy. The ICAEW projection is rather pessimistic compared with the Bank Negara’s GDP forecast of 4.8 per cent for next year and 4.7 per cent this year. Commenting on ICAEW’s rather gloomy forecast, she said the government is maintaining a prudent budget and continues to have emphasis on fiscal consolidation. “To get the 4.8 per cent, you will need to expand the budget deficit significantly, you won’t be looking at consolidating. You need to support more on consumer spending such as having cash handouts for example, tax rate cut,” Fenner added. ICAEW, expects Bank Negara Malaysia to reduce the policy rate by a further 25 basis points cut in the first quarter of 2020 to 2.75 per cent. This is following the recent 50 basis points cut in the US Statutory Reserve Requirement.
Property market to see uptick in H2 2020
PropertyGuru Malaysia maintains its “neutral” outlook for Malaysia’s property market in 2020, but expects a pick up in the second half of 2020. Country manager Sheldon Fernandez said residential overhang had resulted in the supply-demand imbalance in the market hence the downtrend of asking prices for properties, seen since 2015. “Despite government initiatives such as the Rent-to-Own financing scheme and a lower RM600,000 of foreign property ownership threshold under the 2020 Budget to improve the situation, we feel it is still not strong enough to stimulate and turn the market around.” In terms of asking prices for properties in 2020, a year-on-year decrease of 0.9 per cent is expected, similar to the price index published by the recent PropertyGuru Market Index report for Q3 2019. Citing statistics provided by Nawawi Tie Leung Property Consultants, PropertyGuru Malaysia said as of the second quarter of 2019, the overhang units in Malaysia were estimated at 52,666, including 32,810 residential units; 18,186 serviced apartment units; and 1,670 small office home office (SOHO) units.
MITI: Japan’s halal market a big potential for Malaysia
A vast influx of Muslim travellers during the Tokyo Olympics from July 24 to August 9, 2020 is expected to fuel a boom in halal and syariah-compliant foods and products, potentially a big market for Malaysian halal product producers to tap into. International Trade and Industry Minister Datuk Darell Leiking pointed this out at a trade and investment mission in Kobe which ended today. Addressing participants of a Seminar on Business Opportunities in Malaysia, Datuk Leiking said the halal industry is one of the most important sectors for Malaysia to explore together with Japan. “With the upcoming Tokyo Olympics and Paralympics 2020, Malaysia would like to collaborate with Japan in delivering a sustainable solution in halal matters through various angles such as logistics, data analytics, retail, certification, food distribution, and tourism for the Tokyo Olympics 2020 and beyond,” he said. MATRADE’s chief executive officer Datuk Wan Latiff Wan Musa, said the Digital Halal Trade Value Chain initiative was aimed at delivering a sustainable solution for Malaysian companies to export their products to Japan. “The initiative is also in line with Malaysia’s aim to become a Global Halal Economy Enabler for the Tokyo Olympics 2020,” he said. He said Japan itself has indicated its interest to source for halal products and services to cater to Muslim tourists and athletes at the Tokyo Olympics. “There is a potential of more than 140 million meals required at the Olympics’ Athletes Village and approximately 720 million halal meals to be prepared during the event,” he said.
RHB to cease Hong Kong business operations
RHB Bank Bhd will wind down its business operations in Hong Kong. In a filing with Bursa Malaysia, the bank said its subsidiaries on the island will gradually discontinue offering financial services to its existing and potential clients. “The increasingly challenging operating broking environment in Hong Kong has resulted in losses being recorded for RHB Hong Kong Group. As a result, it is no longer viable for RHB Hong Kong Group to continue its business operations. RHB Investment Bank, being the shareholder of RHB Hong Kong Group will provide the requisite support to ensure an orderly winding down of their business operations,” it said.
Japan unveils US$120b stimulus package
Japanese Prime Minister Shinzo Abe has unveiled US$120 billion in stimulus measures to help the world’s third largest economy overcome the aftermath of recent natural disasters. The package is also aimed at helping alleviate the impact of a recent tax hike and survive a potential economic slowdown after a spending boom for the 2020 Tokyo Olympics. Under the plan, the government will spend some six trillion yen on public investment after a series of natural disasters caused huge damage to infrastructure, local media said. Japan’s economy has so far expanded this year, partially because of strong demand related to preparations for the Olympics, which will start in July. Some analysts warned the country may suffer a post-Olympic slump. The package is also aimed at easing the impact of the increase in consumption tax from eight per cent to 10 per cent, which came into effect on October 1, and helping Japanese firms prepare for a global economic slowdown due to the US-China trade dispute. The Tokyo market welcomed the package, with the Nikkei index up 0.71 per cent and the broader Topix climbing 0.48 per cent.