Malaysia faces higher rates, currency risks and an election battle

KUALA LUMPUR (Jan 4): Malaysia faces higher interest rates, currency risks and a contentious election battle in 2018 that will test Prime Minister Najib Razak’s grip on power.

Malaysia has benefited from a global trade recovery and a pickup in domestic spending, with economic growth probably reaching 5.8% last year, according to the median estimate in a Bloomberg survey of economists. Growth is seen moderating to 5.3% in 2018.

A booming economy and higher oil prices have boosted government coffers, allowing Najib to funnel funds to voters burdened by rising living costs. He’s managed this without compromising on his fiscal targets, pledging to narrow the budget deficit to 2.8% of GDP this year, from an estimated 3% in 2017.

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