Banking Triumvirate Charts New Economic Tenor


Banking Triumvirate Charts New Economic Tenor

The Ministry of Finance is organising a pre-budget 2019 conference with CIMB, Maybank and RHB entitled “Malaysia: A New Dawn Conference”. AWANI Review’s Ibrahim Sani speaks to the Chief Economists of the three banks involved to do a stocktake on Malaysia’s economy and to understand a little bit better on their anticipations ahead of the 2019 budget announcement in November.

It seems that the tax holiday has brought the August Consumer Price Index (CPI), measuring headline inflation down to a 42-month low.

While this may excite some quarters, economists are generally concern as the tax holiday have significantly impacted government revenue.

CIMB Group Chief Economist Dr. Donald Hanna, Maybank Group Chief Economist Suhaimi Ilias and RHB Senior Economist Vincent Loo stopped by at Astro AWANI to weigh in on the nation's economic trajectory.

Investors and stakeholders would want to see clear plans being rolled forward by this administration

“Headline CPI inflation drifted lower to 0.2 percent year-on-year in August,” says Vincent Loo of RHB.

“This is of course going to change after the implementation of the Sales and Services Tax (SST) but we don’t know for sure what the impact is since consumer spending remains to be a top concerns for us in the upcoming months,” he continues.

“The prospect of temporary but significant cost savings brought forward consumer spending to 3Q18,” says Suhaimi of Maybank. “We can see this exhibited by a 27 percent increase in car sales in August 2018. Additional SST exemptions granted since the start of September on various items such as mobile prepaid services, premium seafood, rentals of small stalls and could see spending rise,” he says.

But all three economists warn of the lack of details on part of the government.

“What we want to see is more details from the government into the exact plans they want to execute,” says Dr. Donald Hanna of CIMB. “We can’t go on with mere rhetoric for much longer. In the end, investors and stakeholders would want to see clear plans being rolled forward by this administration,” he adds.
Watch the full interview below: