Highlights:

  1. Moody’s sees increased fiscal challenges in Malaysia
  2. Government to review policies to widen wireless tech
  3. Malaysia air passenger traffic growth to rebound in 2019
  4. Bank employees to enjoy 0% housing loan for first RM100k
  5. Malaysia maintains ban on Israeli athletes competing in the country
  6. China’s 2019 GDP may ease to slowest pace
  7. Study reveals Singapore is the best country for expats

Moody’s sees increased fiscal challenges in Malaysia
Moody’s Investors Service sees increased fiscal challenges in Malaysia with the abolishment of the goods and services tax (GST) and introduction of the sales and services tax (SST). Sovereign Risk Group vice-president and senior analyst Anushka Shah said the GST abolishment in favour of a narrower SST would shrink the government’s tax base. “In general, the government’s focus on supporting growth and incomes of poorer households is a factor behind a slower fiscal consolidation path than previously projected,” she said in conjunction with the release of Moody’s report titled “Sovereigns Asia Pacific 2019 Outlook”. Shah said should the government prioritise growth and provisions to low-income households further, Malaysia’s fiscal strength would weaken. The report highlighted that commodity exporting countries would be exposed to a sharper-than-expected growth slowdown in China, whether through reduced demand for their exports or lower commodity prices. The report said Australia, Indonesia and Malaysia would mainly be exposed should weaker Chinese demand lower prices globally. Moody’s forecast median gross domestic product growth rates of 5.5 per cent and 5.2 per cent in 2019 for Asia-Pacific emerging and frontier market economies respectively, while growth in the advanced economies would likely slow to 2.5 per cent. It said the slower growth would be in line with global trade, but monetary policy and domestic fundamentals would remain supportive.

Government to review policies to widen wireless tech
Communications and Multimedia Minister, Gobind Singh Deo said the government is reviewing some policies, especially on the spectrum and industry structure, in an effort to widen wireless technology. He said the effort was in line with the government’s mission in making Malaysia a digital country. “Wireless technology is essential in achieving this objective and my ministry is reviewing some policies, especially on the spectrum and industry structure, to create a more sustainable industry and a win-win situation for the rakyat, the government and the operators,” he said. Gobind said improving Internet access was vital to shaping the future of Malaysia’s economy. He added that Malaysia’s blueprint for the Fourth Industrial Revolution (4IR), has already been laid out by Prime Minister Tun Dr Mahathir Mohamad.

Malaysia air passenger traffic growth to rebound in 2019
Malaysia’s air passenger traffic is set to grow at faster rate of 4.9 per cent this year, up from 2.5 per cent last year.nMalaysia Airports Holdings Bhd (MAHB) forecast domestic passenger traffic would grow by 7.6 per cent and international traffic by 2.4 per cent. In a filing with Bursa Malaysia, the company said the higher domestic growth is a correction from the lower capacity registered in 2018. The recent announcement made to extend the 15-day visa exemptions for China and India tourists to December 2019 would help spur traffic.

Bank employees to enjoy 0% housing loan for first RM100k
Bank employees will soon enjoy zero interest in their housing loans for the first RM100,000. All member banks under the Malayan Commercial Banks’ Association (MCBA) have agreed to grant the benefit, effective April 1. The benefit was offered in the new collective agreement (CA) inked by MCBA and the National Union of Bank Employees (NUBE). The new benefit aims to raise the disposable income of employees, especially those in the B40 category and to support the government’s effort to increase home ownership among lower-income communities. The zero interest rates also apply to employees who have existing staff housing loans. Under the new CA, employees of MCBA member banks will also receive a salary adjustment of up to 12%.

Malaysia maintains ban on Israeli athletes competing in the country
The government maintains its stand of prohibiting Israeli athletes from competing in the 2019 World Para Swimming Championships in Kuching in July. Prime Minister Tun Dr Mahathir Mohamad said that if the Israeli squad was insistent on participating in the championships, it would be a violation (of the ban). He was commenting on Malaysia’s prohibition on Israeli athletes participating in the championships which has elicited an objection from the Olympic Committee of Israel which has put pressure on the organisers for its athletes to be issued visas to come to Malaysia. The championships are seen as an important platform for qualification to the 2020 Tokyo Paralympic Games.

Asian Development Bank predicts China’s 2019 economic growth will slump if trade war deteriorates to worst-case scenario
The Asian Development Bank (ADB) said the outcome of the ongoing US-China trade war will be critical to how China’s economy and those of other Asian nations perform this year. ADB president Takehito Nakao said that if relations were to deteriorate and the trade dispute were to escalate into a full-blown war, “the immediate impact would be particularly hard on China” and that “other economies in developing Asia would initially feel the pinch as production slowed across global value chains.” US tariffs that have already been imposed could crimp China’s economic growth rate by 0.5 percentage point in 2019, worsening to a full percentage point if all bilateral trade were to be taxed at a higher tariff rate, said the former Japanese vice finance minister. The worst-case scenario could slow China’s economic growth to 5.3 per cent, making it the slowest annual increment since quarterly data began to be reported in 1992. The dire forecast underscores the stakes as Chinese and US negotiators wrapped up talks this week aimed at resolving the outstanding issues in the trade war between the world’s two largest economies. Both sides ended their three-day talks in Beijing with the agreement to create a framework to verify China’s commitment to structural industrial reforms.

Study reveals Singapore is the best country for expats
According to an HSBC study, Singapore had high scores across key measures and ticked many of the boxes on the expat wish list deeming it as the best country for expats. After gathering data from more than 22,000 respondents, Singapore topped the bank’s annual Expat Explorer survey. On ranking countries on a range of factors like career progression, work/life balance, healthcare, tolerance and the ability to make new friends it provides an overall package to those surveyed. With a strong and stable economy, expats are certainly drawn to the global financial hub, half of the expats in Singapore moved to progress their careers, more than quarter wanted to challenge and others wanted to improve their earnings. As per HSBC expats in Singapore earn an average salary of $162,000 (£127,350) – $56,000 (£44,000) which is more than the global average. Around 47 percent stayed for the quality of life it offered them and their families nearly 60 per cent of expat parents in Singapore felt their children’s health and well being was better in the Republic. New Zealand took the second spot, and ranked number one for the “experiences” category   that included factors like the quality of life, culture, integration, safety and healthcare. Performing well for “economics” factors was Germany, followed by Canada and Bahrain. Bahrain rose four places in the rankings since 2017 while the Middle Eastern country took the top spot for wage growth. The UK was five places up from last year’s report.