KUALA LUMPUR (Nov 13): Hong Leong IB Research has raised its 3Q17 gross domestic product (GDP) growth estimate to 5.7% year-on-year (from 5.2% y-o-y; 2Q17: 5.8% y-o-y) after the release of various indicators which showed continued strength despite a slight moderation.

In a GDP preview today, HLIB’s Felicia Ling said 3Q17 GDP will be released on 17 November.

“Consequently, we also raise our 2017 full year GDP growth forecast to 5.6% y-o-y (previous: 5.4% y-o-y).

“While we expect near-term growth impetus to remain resilient, we retain our forecast for a more moderate 4Q as the base effect (commodity sector) and exuberance (exports) taper,” she said.

Ling said she expects  Bank Negara Malaysia (BNM) to normalise the interest rate by raising a one-off 25bps in 2H18.

“We do not think BNM is kick-starting a series of hike due to (i) exports spillover has not jeopardised growth stability (ii) oil price strength reflects better supply demand dynamics; underlying inflation remains steady., and (iii) financial stability concerns are in check (i.e. moderate loan growth with slowing leading loan indicators),” she said.