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Where Malaysian Business Confidence Stood in 2Q17

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Business confidence in Malaysia

Malaysian business confidence as reported by MIER (Malaysian Institute of Economic Research) gave an optimistic outlook for Malaysia after 1Q17. Malaysian manufacturers remained highly optimistic about the next 12 months, though consumer sentiment was weak in 1Q17.

MIER is an independent, non-profit organization engaged in economic, financial, and business research in Malaysia. Malaysian business confidence (EWM) rose to 112.7 in 1Q17, compared with 81.20 in the previous quarter.

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Business confidence in Malaysia in 1Q17

Business conditions in Malaysia in 1Q17 remained upbeat, reaching the highest level in the last ten quarters. Business confidence as measured by the MIER Business Conditions Index rose 31.5 points during 1Q17. The 1Q17 index level reflected optimism toward the economic environment for the year, according to the MIER report.

Improved expectations for 2017

Current sales, new orders, expected production, and export sales contributed immensely to the rise in Malaysian business confidence in 1Q17. The expectation index saw a significant rise of 57.5 points, and growth expectations for manufacturing and export sales in 2Q17 were seen as driving sentiments, which stemmed from improved global demand.

Improved global demand

The Malaysian economy’s improved growth expectations have stemmed from improved exports and domestic demand in 2017. The improved economic outlook, especially in major economies like the US (SPY) and the Eurozone (VGK), is expected to improve global (ACWI) demand in Malaysia this year. At the same time, larger emerging (EEM) market economies such as China (FXI) and India (INDA) are also expected to drive international trade in 2017.

However, geopolitical instability and the protectionist stance of some economies are likely to impact global trade performances in 2017. Any decline in international trade will likely affect Malaysia’s trade performance and economic growth.

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