Friday 29 Mar 2024
By
main news image

KUALA LUMPUR (Nov 17): Malaysia's strong third quarter economic growth of 6.2% will likely be viewed by its central bank as an opening to normalise its accommodative monetary policy stance, said Nomura.

As such, Nomura said in a statement today it is reiterating its call of a 25-basis-point interest rate hike at Bank Negara Malaysia's next monetary policy meeting in January.

"Overall, we believe the pick-up in 3Q GDP growth poses upside risks to our full-year 2017 forecast of 5.5%, which is currently in the middle of Bank Negara's new 5.2-5.7% forecast range, announced today.

"We also see upside risks to our 2018 GDP growth forecast of 5%. We expect the current account surplus to narrow slightly from 2.4% of GDP in 2016 to 2.2% in 2017 and to 2% in 2018, but these forecasts are also subject to some upside risks," it said.

Earlier today, Bank Negara announced that gross domestic product (GDP) growth jumped to 6.2% in 3Q from 5.8% in 2Q. The announcement exceeded consensus expectations of a 5.7% growth, said Nomura, but came close to Nomura's 6.3% forecast.

Nomura noted that the improvement in growth was broad based, led by fixed investment growth, which rose 6.7% year-on-year from 4.1% in 2Q and private consumption growth, which inched up to 7.2% from 7.1%.

"By industry, headline GDP growth was led by manufacturing, mining and services, while agriculture slowed but continued to provide a significant boost," it said.

In international trade, net exports contributed a larger 0.2 percentage points (pp) to headline GDP growth from 0.1pp in 2Q, as exports and imports surged by 11.8% y-o-y and 13.4%, respectively.

"The goods trade surplus widened and the services trade deficit was broadly stable. With foreign direct investment also experiencing net inflows in 3Q (from outflows in 2Q), the basic balance surplus widened," it added.

 

      Print
      Text Size
      Share