10-8-2023 (KUALA LUMPUR) Economists are projecting a deceleration in Malaysia’s economic growth for the second quarter of 2023, largely attributed to the sluggish global economy. Recent economic indicators spanning April to June have signalled a notable slowdown in the country’s real gross domestic product (GDP) growth, with forecasts settling around 3.2 percent year on year, according to analysis from UOB Global Economics and Markets Research.
This growth projection represents a downward revision from the initial estimate of 4.1 percent and reflects a moderation from the robust first-quarter growth of 5.6 percent. Despite the softer outlook for the second quarter, UOB has maintained its full-year GDP growth projection at 4.4 percent for the time being.
Concurring with the sentiment, Hong Leong Investment Bank Research also anticipates a subdued second-quarter growth of 2.9 percent year on year, a result of the latest economic indicators. The research house highlights a broad-based moderation and contraction across various sectors as contributing factors to this downtrend.
While Hong Leong expects private consumption to retain its role as a key growth driver, it foresees a moderation in growth. Additionally, it acknowledges downside risks to its 2023 GDP forecast of 4.5 percent.
CGS CIMB, however, offers a slightly more optimistic outlook, estimating Malaysia’s second-quarter GDP growth to have expanded by 3.3 percent year on year. This expansion is attributed to the robust performance of the services and construction sectors, despite a deceleration in manufacturing and agriculture growth rates.
The research suggests that domestic sectors will continue to serve as pillars of growth in the upcoming quarters, with government interventions and cash assistance playing a supportive role.
Taking into account the latest economic data, TA Securities suggests that Malaysia’s second-quarter real GDP is likely to experience moderate growth. The research house acknowledges the potential deviation from earlier projections, speculating a growth rate potentially falling within the vicinity of 2.8 percent year on year, below the initial anticipatory threshold of 3.2 percent.
Maybank Investment Bank, drawing insights from various indicators, expects Malaysia’s second-quarter GDP growth to slow to 3 percent year on year. The services sector, industrial production index, crude palm oil output, and construction works’ value all exhibited a moderation trend during the second quarter.
Maybank Investment Bank’s current full-year real GDP growth forecast stands at 4.5 percent. As Malaysia navigates the challenges posed by the global economic landscape, close monitoring of these indicators will be essential to accurately gauge the trajectory of its economic recovery.
