KUALA LUMPUR (July 2): AmBank Group Research expects Malaysia’s 2Q2019 gross domestic product (GDP) to possibly expand between 4.5% and 5.0%.

In a note today, AmBank group chief economist and head of research Dr Anthony Dass said Malaysia’s Nikkei Manufacturing Purchasing Managers Index (PMI) eased further in the month of June to 47.8 from 48.8 in May.

Dass, who is also adjunct professor in economics at University of New England, Sydney, Australia, said it has been in the contraction region for the ninth consecutive month.

He said demand condition is still soft while fewer new orders from overseas clients weighed on production volumes.

Dass said the current PMI data suggests that the business operating environment remains a challenge, especially on the export market segment.

Nonetheless, he said businesses are beginning to show positive forward-looking outlook.

Despite the PMI being in the contraction region, we believe the overall economic growth will still be above 4% based on historical comparison.

“Looking at the 1Q2019 average reading of 47.6, 1Q2019 GDP grew 4.5%.

“And given that the 2Q2019 average PMI is higher at 48.7, we can logically expect 2Q2019 GDP to possibly expand between 4.5% and 5.0%,” it said.