NiagaTimes predicts that 2018 would be an upswing year for Malaysia in the economic sense.
The uncertainties prior to the country’s General Election which would be held early of the year would be over finally. This will augur well for most Malaysians as the last few years have been uneasy and edgy with regards to the leadership of the country. When the election is finally over, there will only be one conclusion – either the people continue to give mandate to the current ruling party, Barisan Nasional under the leadership of its premier Datuk Seri Najib Razak (who is often opposed) or the opposition takes over the governance of the country. While most will fear that 2018 could be a ‘catastrophic’ year, the fact remains that things are looking good for Malaysia. This is the year for the mother of all elections in Malaysia to settle and put a lot of matters to rest, enabling Malaysians to move forward on a renewed mindset after having done with the political issues and uncertainties.
While the SMEs and individuals can already benefit from the 2018 budget, many can also expect to benefit from election goodies and manifestos to be unveiled in the coming weeks or months.
Over the years, whatever that has been forecasted for the country’s economic growth has always been inspiring notwithstanding the impact it has on the ordinary man-in-the-street.
According to the Malaysian Finance Ministry, the real gross domestic product (GDP) estimates for the country for 2018 is forecasted to grow between 5% and 5.5% from a year earlier, on the back of resilient domestic demand amid a favourable external sector. Meanwhile, The Conference Board, a New York-based global, independent business research association, has projected that Malaysia will record a 5% gross domestic product (GDP) growth in 2018, slightly lower than the 5.5% growth forecast this year.
Having said that, in the year 2018, Malaysian SMEs should also take advantage of the expanding digital economy opportunities, Artificial Intelligence (AI) advancements and China’s One Belt Road Initiatives to improve and globalize their businesses.
Although some organizations and individuals use technologies to simply execute existing tasks on the computer, the digital economy is more advanced than that. Malaysians should move away from simply using a computer to perform tasks traditionally done manually or on analog devices. They should acquire the ability to leverage technologies to execute tasks and engage in activities that weren’t possible before. Such opportunities for existing entities to do better, to do more, to do things differently and to do new things relates to the concept of digital transformation.
Instead, the digital economy highlights the opportunity and the need for organizations and individuals to use technologies to execute those tasks better, faster and often differently than before.
Many big companies will also be expected to embrace AI, an area of computer science that emphasizes the creation of intelligent machines that work and react like humans. Some of the computer activities using artificial intelligence are designed for speech recognition, learning, planning and problem solving. So SMEs need to adapt themselves to stay competitive and relevant in the coming years.
Finally, China’s Belt and Road Initiative, the broad infrastructure and market-building initiative of the world’s second-largest economy opens up a new world of opportunities for the business communities in Malaysia.
According to Forbes, the Belt and Road Initiative is intended to span 68 countries on four continents, reaching more than 60% of the world’s total population, one-third of global GDP, and a quarter of all goods the world moves. At a forum held last May in China for nations involved in the Belt and Road Initiative, many heads of state of countries showed up, making clear just how important the Belt and Road program is. China will have a substantial impact beyond its own borders as it decides how to allocate the $900 billion in foreign infrastructure spending President Xi suggested would be available for the program. Malaysia is strategically located to reap the benefits arising out of this initiative.
The year 2018 will also see the organizing of the FIFA World Cup in Russia. Every time the World Cup is organized, there are a lot of business spin offs and Malaysia is one country with a huge following for the game. During this time, more business activities are generated in the form of sales of merchandise and in the F&B arena.
It is also unlikely that decisions by the Trump administration, the Brexit issue and IS threats will have any significant adverse impact on the Malaysian economy. Our cordial relationship with neighbouring countries is a great advantage for our economy to be boosted.
Goldman Sachs has stated that for the first time since 2010, the world economy is outperforming most predictions, and the expectation is for this strength to continue. The global GDP forecast for 2018 is 4.0%, up from 3.7% in 2017 and meaningfully above consensus. Another good thing is that the strength in global growth is broad-based across most advanced and emerging economies.
Therefore, Malaysians ought to have a positive outlook on the nation’s economy in the coming year.