Macroeconomic Forecast Malaysia

Malaysia's balance of payment position is expected to improve in 2010. We believe the recovery in capital inflows will bolster the financial account, compensating for a smaller current account surplus. Indeed, tentative signs of rebalancing amid a subdued global export outlook and rising domestic demand will see Malaysia's trade surplus narrow in 2010-11. BMI is forecasting a current account surplus of US$28.3bn in 2010 (or 12% of GDP), from US$32.0bn in 2009. A key risk to our outlook is a sharper-than-expected Chinese slowdown, which may batter Malaysia's current account in the near term.

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