KUALA LUMPUR (Jan 12): AmBank Group Research foresees a stronger US Dollar/ringgit (USD/MYR) outlook for 2018 with an end-period projection at 3.95 and full-year average at 4.00-02 as its base case while the best case for end-period is 3.76 and full-year average at the 3.80–82 levels.

In a report today, AmBank group chief economist and hed of research Anthony Dass said November’s Industrial production (IP) accelerated to 5.0% year-on-year (y-o-y) driven by manufacturing output which expanded by 6.8% y-o-y with both the output from mining and electricity rising moderately by 0.2% and 3.9% y-o-y respectively.

He said supporting the strong manufacturing output was manufacturing sales which continued to grow at double digits for the 12th consecutive month, up 10.9% y-o-y.

“We believe the growth is being supported by the continued strong global demand for electronics, intra-regional trade flows and resource-based products,” he said.

Dass said he expects the positive manufacturing momentum in terms of production and sales to continue given that imports are growing at a healthy pace, up 15.4% y-o-y in November largely coming from capital imports (+12.2% y-o-y) and intermediate goods (+13.8% y-o-y).

“Hence, we reiterate our 2017 and 2018 gross domestic product outlook of 5.9% and 5.5% respectively.

“Besides, we foresee a stronger USD/MYR outlook for 2018 with our end-period projection at 3.95 and full-year average at 4.00-02 as our base case while the best case for end-period is 3.76 and full-year average at the 3.80–82 levels,” he said.

Dass added that he believes sales are being supported by the continued strong global demand for electronics, intra-regional trade flows and resource-based products.