Malaysia will need some measures in place to counter the effects of an economic slowdown in Singapore which seem to be imminent, said economist Yeah Kim Leng.
“We take Singapore's economy as a leading indicator of the health of the regional as well as the global economy.
"The republic has downgraded its Gross Domestic Product (GDP) growth forecast for 2019 to “0.0 to 1.0 per cent”, with growth expected to come in at around the mid-point of the forecast range", he was quoted as saying by Bernama.
Yeah was asked whether Singapore's slower economic growth would somewhat affect its neighbour Malaysia.
He said this after speaking at Regional Economic Studies Programme Seminar organised by the ISEAS–Yusof Ishak Institute in Singapore.
Yeah, a professor at the Sunway University Business School, spoke on the topic of “Malaysia’s Budget 2020 and its Tough Balancing Act: An Economist Perspective” at the event.
He said the republic’s economy grew marginally by 0.1 per cent on a year-on-year basis in the second quarter, moderating from the 1.1 per cent growth in the previous quarter.
However, Yeah noted that looking at the current economic condition, Malaysia does see sustained consumer spending and benefit slightly from a trade diversion.
“We have seen some increased in investment from China and India… that has helped to offset some of the concerns from the global economic slowdown and the effect from US-China trade war,” he said.
Malaysia’s GDP is expected to grow by 4.7 per cent this year and 4.8 per cent in 2020.
Yeah said Malaysia will only need a stimulus package if the global economy worsens.
“We will need a stimulus package to offset the likely impact on our export-oriented industries that will have a multiplier effect on the domestic economy.”
"The prospect of the downturn will especially trigger by global recession or worsening performance of a global economy dipping to below 2.0 per cent," he said.