United Overseas Bank (Malaysia) Bhd (UOB Malaysia) raises its forecast for Malaysia’s full year gross domestic product (GDP) to 5.0%, up from 4.3%.
The Malaysian Ringgit saw some volatility in its trading against the US Dollar in the second quarter, due to problems in the Eurozone. While the markets have settled somewhat recently, the Ringgit could face renewed downward pressure over ongoing Eurozone concerns.
Strong private consumption and investment are expected to continue to provide some insulation against the expected weakness in external demand in the second half of 2012. The recently announced minimum wage for the private sector, which will be implemented by late October, is also expected to boost growth in the last quarter of this year, and support private consumption growth in the medium term. Furthermore, Malaysia is expected to maintain its expansionary fiscal policy and continue with its ETP projects ahead of the elections.
UOB Malaysia’s Institutional Financial Services business has extended financing to several large infrastructure projects under the ETP such as the integrated urban mass rapid transit (MRT) system, the extension lines under the light rapid transit (LRT) system and the low cost carrier terminal (LCCT) projects.