THE second half of this year is expected to yield better economic results, Deputy Minister of International Trade and Industry Dr Ong Kian Ming said ahead of Pakatan Harapan’s first anniversary in federal power tomorrow.

He said there had been negative news on the economy in the last year since winning the 14th general election, but there were signs of improvement due to measures taken by Putrajaya.

These include the Finance Ministry saving RM805.99 million from 121 existing infrastructure projects valued at RM13.93 billion.

“This will have a trickle down effect on construction and consumption activities,” Ong said in a statement today.

Additionally, domestic consumption and investment will also be spurred as more goods and services tax (GST) and income tax refunds are paid to firms and individuals.

As of February this year, the government has refunded RM7.9 billion.

“Thirdly, with resumption of certain big-ticket public infrastructure and construction projects, notably the East Coast Rail Link (ECRL) and the Bandar Malaysia development, corporate activity will increase as will investment interest, especially from companies from China. 

“These are business confidence boosting announcements that hopefully, will be reflected in the indicators for the second half of 2019,” Ong added.

Elsewhere on the domestic front, Ong said the Nikkei Manufacturing PMI had jumped from 47.2 to 49.4 from March to April this year.

“Even though this figure is less than 50, in the context of Malaysia, IHS-MARKIT has clarified that the 49.4 figure is consistent with an economic growth projection of 5.2% (as compared to developed countries where a figure below 50 indicates that the economy is contracting).”

In the property sector, he said transaction volume had increased by 0.6%, and value increased by 0.3%, after three consecutive years of decline.

“With the launch of the Home Ownership Campaign (HOC) 2019 and various discounts and tax incentives being offered to property buyers, there is cautious optimism of a more vibrant property market in 2019.”

Other areas of expected improvement in 2019 were in corporate earnings and vehicle sales.

Vehicle sales had already shown an increase by 9.6% in March on a year-to-year basis, with Proton’s SAGA and X70 models doing especially well.

A more positive outlook for Malaysia in the second half of the year was also aided by encouraging indicators on the regional front, Ong added, noting increases in the Manufacturing PMI for Asean countries.

Fears over US-China trade tensions also appear to be waning as China records increased activity on its service business activity index and on other indicators measuring manufacturing and services.

The PH government had also moved to clean up financial scandals involving major institutions, such as 1Malaysia Development Bhd, Felda and Tabung Haji.

“With greater policy certainty and better domestic and regional economic conditions, I am cautiously optimistic that we are steering the ship towards the right economic direction. 

“After the mixed results of our first year in government, things should start looking and feeling better, and very soon, too,” Ong said. – May 8, 2019.