Malaysia Outlook – Strong Growth Data For 1Q 2018
Highlights
• 1Q GDP growth is strong – albeit slower — at 5.4 per cent YoY
• At this juncture, we still stick to our growth forecast of 5.5 per cent YoY for 2018
Few candidates for EM pain
The 2013 taper tantrum showed that when U.S. monetary policy is expected to tighten, financial markets tend to focus on the consequences for poorly-managed economies with significant external deficits.
The Easy Money Has Been Made
I have been tracking and analysing markets for almost 30 years, but the past 10 years were the most unusual and difficult years for analysts like me as markets experienced a confluence of unprecedented events and uncertainties that effectively caused a big paradigm shift and heralded in a new normal for financial markets.
Growth Still Looks Healthy
Flash PMIs for April give a timely update on the state of the business cycle and suggest that recent concerns about economic slowdown are overdone. PMIs were roughly stable in April, at levels associated with growth running comfortably above trend
Volatility Is Not All Bad…
The return of volatility was the big story of the last quarter.
Naturally, many investors have been unnerved by the increased volatility. However, just because stocks were down in the last quarter does not mean that market fundamentals have deteriorated. Volatility can work in investors’ favour, as long as they keep an eye on the longer term picture and leverage upon it as part of a disciplined investment plan, while staying diversified across various asset classes.
Brother Can You Spare $1trn
The latest projections from the non-partisan US Congressional Budget Office (CBO) show the budget deficit heading over $1trn by 2020. This is the result of the recent tax reform package that was followed by a big increase in government spending.