Various financial institutions have been reducing their projected GDP growth estimates for Malaysia. It was hoped that GDP growth would be between 5.5% and 6.0% this year, following close to the 6% growth last year, but that is looking increasingly unlikely. Current estimates by many institutions put anticipated growth between 4.5% to 5.0%. Various factors are coming into play which negatively impact Malaysia. As the country is a net exporter of crude oil, plummeting oil prices are reducing the value of exports. This is further compounded by the uncertain global economic outlook for many countries, especially in Europe. Domestic consumption and investment have been key drivers, but are expected to slow in 2015. The inflationary impact of GST is making some consumers more cautious about spending money, and the government’s desire to cut subsidies also has people worried. However, falling oil prices have meant lower petrol prices, which should help to partially counter some of these concerns.
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