AFFIN HWANG SEES 5PC REAL GDP GROWTH
Better production numbers, export orders to boost performance
RUPA DAMODARAN KUALA LUMPUR email@example.com
IMPROVING production numbers and export orders coupled with a more positive outlook by businesses will likely see a spike in economic activities in the first quarter of this year.
Affin Hwang Capital Research expects the real gross domestic product (GDP) growth to recover stronger from 4.5 per cent yearon-year in the fourth quarter of last year to above five per cent in the first quarter of this year.
Bank Negara Malaysia will release the first quarter GDP details on May 19.
On Tuesday, Malaysia’s manufacturing Purchasing Managers’ Index (PMI) rose to 50.7 last month, from 49.5 in March, rising above the 50-level for the first time since March 2015, indicating stronger expansion and growth momentum.
This short-term leading indicator, added Affin Hwang Capital, has been tracking closely the country’s performance in the manufacturing sector as well as exports of manufactured goods.
“The trends in Malaysia’s monthly PMI was also consistent with the country’s leading index (LI) — an indicator designed by the Statistics Department to predict the direction of the economic activity — that rose from 0.5 per cent year-on-year in January to 0.8 per cent in February,” commented economist Alan Tan.
The research house is confident that Malaysia’s exports, which rose sharply from 13.6 per cent year-on-year in January to 26.5 per cent in February, will likely remain strong in the first half of the year.
The report also noted that apart from output and new orders, all the other major components, namely employment, suppliers’ delivery times and stocks of purchases, improved in April.
The research house expects the economy to grow by 4.4 per cent this year but expects to revise the projection after the release of the first-quarter GDP results.
Malaysia’s exports, which rose from 13.6pc in January to 26.5 per cent in February, are likely to remain strong, says Affin Hwang Capital Research.