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EXPORTS TO ADD 2.6 PERCENTAGE POINTS TO MALAYSIA'S OVERALL GDP THIS YEAR
KUALA LUMPUR, Jan 23 (Bernama) -- Export is projected to add 2.6 percentage points to the country's overall gross domestic product (GDP) this year compared with an estimated 1.2 percentage points in 2013.
Kenanga Investment Bank Bhd's Senior Vice President and Economist, Wan Suhaimie Saidie said following a more positive global outlook for 2014, Malaysia's open economy would benefit from an increased demand for its exports.
"The United States' economy is improving, Europe is out of recession and the weakening ringgit will help our exports to become more competitive," he told Bernama on the sidelines of the inaugural "Spotlight on Malaysia" forum organised by Bursa Malaysia here Thursday.
The momentum would build up once the global economy is in a clearer and firmer position, which is expected to be in the second half of the year, he added.
This external demand, coupled with sustained domestic growth should be able to push the country's GDP growth to between 5.0 per cent and 5.5 per cent this year, he said.
As for the local market scenario, Wan Suhaimie said there is a possibility that the stock market benchmark index might reach an all-time high of around 1,900 points.
"There is possibility for the market to touch a new level of high but we're still at the mercy of global market condition. The downside is still there. Global indicators would be our prime indicator where our market will be going in the next three to five months," he said.
The preferred counters to help boost the market are that of commodities such as oil and gas and plantations.
On interest rate, Wan Suhaimie said it was expected to stay as the current rate is good enough to support economic growth.
Even if there is a rise in interest rate, it would not be high due to the current price hike and the soon-to-be-implemented Good and Services Tax (GST), he said.
"My point of view is that if the central bank raise the interest rate, it will not be as high because come 2015 when the government implement the GST, the impact on the GDP growth will definitely not be favourable for the economy. Hence there won't be any necessary reason for the central bank to raise the interest rate right now," he said.
-- BERNAMA