Malaysia’s gross domestic product (GDP) is forecasted to reach US$1.3 trillion (RM5.6 trillion) and surpass that of Singapore by 2030, reported Bernama, citing a report from IQI Global.
The global property and investment advisory firm predicted that the country’s economy will trend upwards over the next three to five years, helping to achieve this trillion-dollar feat. It will also be bolstered by higher exports and consistent government support for corporates as well as by strong local and foreign investments, particularly those from China.
According to IQI Global’s Chief Economist Shan Saeed, large-scale investments will continue to pour into Malaysia due to China’s Belt and Road Initiative (BRI).
In fact, Chinese companies have agreed to invest approximately RM31.3 billion in Malaysia last May. This is in addition to 14 memorandums of understanding signed in November 2016 involving a total of RM143.6 billion investments across various sectors, including construction.
“The BRI will be a game changer to Malaysia and besides this country, BRI would also be relevant to the other two ASEAN countries — Indonesia and the Philippines. Singapore will also join the initiative soon,” he said.
Notably, the BRI is a development strategy spearheaded by Chinese President Xi Jinping that aims to create a trade route connecting Asian countries with Europe via a massive network of ports, roads and rail lines.
Thanks to this, Malaysia is anticipated to become the trade corridor that will facilitate the flow of goods and services from China to other countries in Southeast Asia.
“The country will be getting a lot of investments, not only from China but also from global investors because of BRI,” he explained.
Once investors see that Malaysia is growing more prosperous, Shan believes that more will decide to invest, and this would strengthen the local currency, which is trading between 4.15 and 4.30 for a single greenback.
“Moving forward I see the US dollar to weaken further in the second half of 2017, causing other currencies to appreciate including the ringgit. I won’t be surprised if the ringgit touches 4.15 by year-end,” Shan added.
This article was edited by the editorial team of PropertyGuru. To contact them about this or other stories email Editorial-MY@propertyguru.com.my
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