Malaysia’s real GDP growth to expand by 4.7 pct y-o-y for 4Q18

KUCHING: Malaysia’s real growth domestic product (GDP) growth has been projected by analysts to expand by 4.7 per cent year on year (y-o-y) for the fourth quarter of 2018 (4Q18) while 2019 should see growth of around five per cent.

In an economic update, Affin Hwang Investment Bank Bhd (AffinHwang Capital) expected Malaysia’s real GDP growth to expand by 4.7 per cent y-o-y for 4Q18.

This is compared to 4.4 per cent in the third quarter of 2018 (3Q18), and average around 4.8 per cent in 2018 (5.9 per cent in 2017).

“In 2019, real GDP growth is projected to be around five per cent, amid higher projected global oil prices, the repayment of RM37 billion for Goods and Service Tax (GST) and income tax refunds as well as steady domestic demand supported by the 2019 Budget measures,” the research firm said.

“However, with global semiconductor sales slowing in 3Q18, which expanded by 13.8 per cent y-o-y, compared to 20.5 per cent in 2Q18, we expect some slowdown in demand for Malaysia’s electrical and electronics (E&E) sector.”

Meanwhile, the research arm of Kenanga Investment Bank Bhd (Kenanga Research) in a separate note expected global manufacturing activity to remain subdued going forward.

Kenanga Research expects to see weaker trade figures in the coming months as new exports orders were weak across regions and as Baltic Dry Index inched lower, pointing towards softer demand for raw materials.

“Hence, we maintain our view that GDP growth will moderate in the second half of 2018 (2H18) to 4.7 per cent from 4.9 per cent in the 1H18.

“This result in our whole year 2018 growth forecasted to slow to 4.8 per cent from 5.9 per cent in 2017,” it said.