KUALA LUMPUR (Dec 12): Hong Leong IB Research (HLIB) has lowered its gross domestic product (GDP) growth forecast for Malaysia in 2015 to 4.8% (from 5%) with lower Brent crude pil price assumption of US$75 per barrel.

In a note Friday, the research house said the industrial productio nindex (IPI) growth eased to 5.0% year-on-year (y-o-y) in Oct (Sep: +5.4% y-o-y), but beating market expectations of a 4.2% y-o-y gain.

It said all sectors continued to chalk up positive expansion.

HLIB said the better-than-expected IPI growth in October was solely credited to strong recovery in the mining sector, offsetting weakness in both manufacturing and electricity segments.

The research house said despite the stronger-than-expected IPI growth in October, a slew of factors point to lackluster IPI growth outlook moving into 2015.

It said these include (i) uneven global growth with heightened downside risks (ii) softer regional PMIs (iii) potential cut in O&G capex and public DE due to falling global crude oil prices, and (iv) normalization in E&E trade.

“Given the sharp decline in global oil prices, we cut our GDP forecast for 2015 to 4.8% (previously 5.0%) with lower Brent oil price assumption of US$75/bbl.

“Should crude oil price averages below US$75/bbl in 2015, GDP growth (particularly manufacturing, construction & services) may be further affected by a cut in public development expenditure and delays in Petronas's capex.

“We maintain our view that BNM will leave its OPR unchanged at 3.25% throughout 2015. Macroeconomic conditions have recently turned unfavourable while the underlying inflation risk is manageable. Risk of financial imbalances has also abated with several months of decline in loan applications for purchase of properties,” it said.