KUALA LUMPUR (May 18): AmBank Group Research said Malaysia’s 1Q2018 gross domestic product (GDP) grew slightly below house expectation of 5.5% and the market’s projection of 5.6%.

In his economic update today, AmBank group chief economist and head of research Dr Anthony Dass said it grew 5.4% year-on-year (y/y) from 5.9% y/y in 4Q2017, supported by private consumption that rose 6.9% y/y (7.0% y/y in 4Q2017) and exports by 3.7% y/y (6.7% y/y in 4Q2017).

He said on the supply side, it was noticed strong growth coming from the services sector.

Dass said apart from private consumption and services, he noticed that most of the other economic segments showed some loss of growth momentum.

“Still, our current 5.5% GDP growth for the full year remains, as we expect the private consumption and services sectors will continue to support growth together with other areas of business activities.

“With the announcement of the Goods & Services Tax removal, added with the potential reintroduction of fuel and electricity subsidies as well as the review of toll roads, these suggest that the underlying inflation will pick up gradually.

“While our base case for OPR remains with a total of one rate hike by  Bank Negara Malaysia that took place in January with the OPR now at 3.25%, the probability for a second rate hike in  September 2018 remains at a low 45%,” he said.