In a statement today, she said positive labour market conditions and capacity expansion would continue to support robust private consumption and investment respectively.

She said Malaysia’s macroeconomic fundamentals also remained strong, providing the country with the requisite buffers to effectively manage potential shocks to the economy.

BNM today announced a slower gross domestic product (GDP) growth of 4.5% in the second quarter (Q2) of 2018 due to supply disruptions while private sector activity continued to be the primary driver of growth.

The statement said headline inflation was projected to moderate going forward, but the extent of the moderation would depend on the pass-through from changes in consumption tax policy.

Underlying inflation, which excludes the impact of changes in the consumption tax policy, is expected to remain relatively stable in the coming quarters supported by sustained private sector spending.

Meanwhile, headline inflation in Q2 declined to 1.3% (Q1: 1.8%), mainly reflecting the zero-rating of the goods and services tax (GST) rate.

The impact from zero-rating the GST, however, was offset by higher transport inflation.

Nevertheless, the fixing of the RON95 fuel price since March 22 helped contain further increases in fuel inflation during the quarter, it said.