Brexit’s Aftershocks – What to Expect

11 July 2016


  • Brexit raises fears of a global recession and financial contagion
  • Brexit uncertainty will escalate the risk of recession in UK. Prolonged negative spillovers will dent the recovery of the EU
  • Prompt policies intervention to safeguard financial stability as well as adopting pro-growth measures
  • Malaysia will be affected via both trade and financial channels but should remain manageable
  • Malaysia’s decent economic growth has been propelled by the strength of domestic demand, albeit slower amid anemic export growth
  • Amid the limited fiscal space, selective and targeted fiscal spending programmes are expected to cushion domestic economy
  • Bank Negara Malaysia’s policy priority is to safeguard financial stability. A cut in interest rates is warranted if the downside risk to GDP growth rises

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