Economists expected Malaysia to post lower growth in the second quarter on slowing global economy.
UOB Global Economics and Markets Research said Thursday in a note that April to June economic indicators have pointed to a further slowdown in Malaysia’s real gross domestic product (GDP) growth for the second quarter of 2023, which the research house projected to settle at 3.2 percent year on year.
The latest GDP growth projection is lower than its initial estimate of 4.1 percent. It also moderated from Malaysia’s first-quarter growth of 5.6 percent.
Despite the slower growth projection in the second quarter, UOB maintained Malaysia’s full-year GDP growth projection at 4.4 percent for now.
Hong Leong Investment Bank Research also expected Malaysia to record slower growth of 2.9 percent year on year in the second quarter following the release of the latest indicators.
“Growth is expected to be weighed down by moderation and contraction across all sectors,” said the research house.
On the demand front, Hong Leong anticipated private consumption to remain the key growth driver, although the growth is expected to moderate.
It also sees downside risk to its 2023 GDP forecast of 4.5 percent.
CGS CIMB, on the other hand, estimated Malaysia’s second quarter GDP growth expanded by 3.3 percent year on year, led by the services and construction sectors amid decelerated growth in manufacturing and agriculture sectors.
However, it said domestic sectors will continue to anchor growth in the coming quarters, aided by cash assistance and government price interventions.
Based on the latest economic data, TA Securities also said that Malaysia’s second-quarter real GDP could expand moderately.
“Significantly, this trajectory could potentially deviate from our earlier projections, leaning towards an outcome that falls beneath our initial anticipatory threshold of 3.2 percent year-on-year, possibly settling around the vicinity of 2.8 percent year-on-year,” said the research house.
Maybank Investment Bank also expects Malaysia’s GDP growth to slow to 3 percent year-on-year in the second quarter based on the latest data points.
It noted that the growth of the services sector, industrial production index, crude palm oil output and value of construction works in Malaysia were all moderating in the second quarter.
The research house’s current full-year real GDP growth forecast is 4.5 percent.