KUALA LUMPUR, Jan 11 ― HSBC expects the economic recovery in Malaysia to be quite strong this year, with the gross domestic product set to expand 5.6 per cent despite the impact of the recent floods in the country.
“It’s very likely that this year will be the year in which companies will start to invest and grow their operations, especially with the huge long term prospects for Southeast Asia,” he said today during a virtual media briefing on HSBC's Investment Outlook 2022. “I think the pillar of growth for Malaysia is going to be largely consumption, investment, and support from the manufacturing sector which will still be very robust.
He said the fiscal policy would likely remain expansionary in 2022 with a budget deficit target of 6.0 per cent of GDP, compared with a targeted deficit of 6.5 per cent in 2021. “We expect that inflation will come down some time in 2022 and the five rate hikes that we expect from the US Fed between March 2022 and September 2023 are still slower than what we have seen in the previous US tightening cycles,” she said. “This should remain supportive of our risk-on strategy with overweight allocation to global equities and preference for US, European and Asian equities.”
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