ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailPositive ArrowIcon PrintIcon Twitter
Politics

Malaysian PM could capitalize on robust economy in an early election: Nomura

As exports rebound, investment bank sees ruling party winning more seats

 (placeholder image)
Malaysian Prime Minister Najib Razak attends a summit at the Belt and Road Forum in Beijing on May 15.   © Reuters

KUALA LUMPUR -- Nomura Holdings has predicted a larger win for Malaysia's ruling government should an election be called this year, citing positive macroeconomic achievements and a weak opposition force.

Euben Paracuelles, the investment bank's senior economist in charge of Southeast Asia, told reporters on Monday that investors could expect the current fiscal reforms to continue if Prime Minister Najib Razak returns to power for a third term.

"The chance of Barisan Nasional winning more seats is a really a possibility," said Paracuelles, referring to Malaysia's ruling coalition, based on a sharp rebound in exports and the resultant economic spillover.

In the first four months of the year, overseas shipments improved by 21% year-on-year, as trade protectionism risks weakened. Expansion in external demand has also indirectly led to the low unemployment rate -- of 3.4% as of April -- and contributed to growing private consumption.

The country's inflation growth has also showed signs of retreat, declining to 3.9% in May after climbing to 5.1% in March.

Nomura has upgraded the country's gross domestic product outlook from 4.8% to 5.3% for 2017. The government's official forecast is between 4.3% and 4.8%.

The general election is due by mid-2018 but some market analysts including Nomura are predicting a window of opportunity for Najib in late September or early October. They say Najib may want to capitalize on the positive economic sentiment and a fractured opposition.

Nomura's Paracuelles said Najib could surpass 2013's election result when he won 133 out of 222 seats, as the opposition has no track record, especially in implementing economic reforms.

Even so, Lee Hwok Aun, senior fellow at Singapore's ISEAS-Yusof Ishak Institute, warned of possible dissent from the lower income parts of the population over the rising cost of living. He noted that voices from the ground suggest uncertainty among the underprivileged who may use their feelings of "economic hardship" to vote against the ruling party.

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Try 1 month for $0.99

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this month

This is your last free article this month

Stay ahead with our exclusives on Asia; the most
dynamic market in the world
.

Get trusted insights from experts
within Asia itself.

Try 3 months for $9

Offer ends July 31st

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to Nikkei Asia has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media

Nikkei Asian Review, now known as Nikkei Asia, will be the voice of the Asian Century.

Celebrate our next chapter
Free access for everyone - Sep. 30

Find out more