KUALA LUMPUR (Aug 13): CIMB IB Research has lowered its second quarter 2018 (2Q18) gross domestic product (GDP) growth forecast for Malaysia lower to 4.9% year-on-year (y-o-y) versus 5.2% initially.

In a note Aug 10, the research house’s Michelle Chia and Lim Yee Ping said Malaysia’s June IPI growth of 1.1% y-o-y missed expectations due to a sharp contraction in mining output, which negated improvements in the manufacturing and electricity indices.

Chia and Lim said stronger domestic demand, spurred by festive celebrations and the GST tax holiday, drove manufacturing production higher.

“Signs of the consumption rebound were also corroborated by better readings in retail trade, motor vehicle sales and the F&B services index.

“The weak mining data outturn compounds weaker trends in agriculture, construction and finance, leading us to revise our 2Q18 GDP growth forecast lower to 4.9% y-o-y,” they said.