Subscribe:

Pages

Wednesday, 25 July 2018

(The Star) Malaysia’s GDP may have grown faster in Q2

PETALING JAYA: Malaysia’s economic growth is likely to have grown at a faster pace in the second quarter, compared with the first quarter of this year, based on the coincident index (CI).

AmBank Research, in its report yesterday, said the country’s gross domestic product (GDP) was expected to grow between 5.5% and 5.7% in the three months to June 2018, compared with 5.4% in the preceding quarter.

Nevertheless, the brokerage in its report yesterday conceded that GDP growth for the third quarter of this year would likely soften, as suggested by the latest leading index (LI).

AmBank Research kept its full-year GDP growth at 5.5%, with the lower end at 5.3%.

Pointing to the CI, which grew 2.2% to 133.7 points in May, AmBank Research said, the data, which shows the current state of the economy, indidicated that the GDP performance for the second quarter should be stronger than the first quarter.

“Factoring in the key macro data for the first two months of the second quarter such as industrial production, manufacturing sales, exports, imports and loans approved, we are optimistic the GDP should perform better than the first quarter of the year,” AmBank Research said.

“Our preliminary estimates suggest the second-quarter GDP could expand between 5.5% and 5.7% versus 5.4% in the first quarter,” it added.

Data from the Statistics Department showed that between April and May, manufacturing sales grew an average of 6.9%, compared with 6.5% in the first quarter; while exports rose 8.7% against 6%; imports gained 4.6% compared to -0.3%; and loans approved averaged 11.1% versus 4.9%, driven largely by business loans which grew 28.2% compared to 0.2%.

Bank Negara is scheduled to announce the second-quarter GDP results on Aug 16.

Meanwhile, AmBank Research said LI in May suggested some signs of softening were evident in the third quarter of this year.

“The LI, which unveils the forward looking economic expectation, fell 0.7% to 117.8 points, suggesting the potential economic outlook could take a slight breather sometime in the third quarter of this year,” the brokerage explained.

This was in line with the view of the Statistics Department, which said Malaysia’s economy is expected to grow at a slower rate in the next four to six months based on the decline in the monthly LI.

The department on Monday said the monthly change in the LI showed a negative growth of 1.1% to 117.8 points in May 2018 from 119.1 points in April 2018.

It noted that the LI indicators are useful as short term predictors of the economy.