Malaysia to stay on an improving track

Today’s better-than-expected Q2 GDP figures confirm that Malaysia is pulling out of recession. Malaysia’s upswing will likely be sluggish compared to the region but this should ensure that the reemergence of inflation is slow as well. Bank Negara will probably be one of the last in Asia to hike rates. This should mean that the ringgit struggles relative to other regional currencies although probably not by much, as KL stocks have a good chance of outperforming.

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