KUALA LUMPUR (May 12): RHB Research Institute Sdn Bhd has maintained its real gross domestic product (GDP) growth forecast of 4.5% for 2017, versus 4.2% in 2016 and said the Industrial Production Index (IPI) was sustained at 4.6% year-on-year (y-o-y) in March, from +4.7% in February, on the back of a rebound in mining output and resilient manufacturing growth.

In an economic update today, the research house said it envisages real GDP to pick up to slightly more than 5% y-o-y in 1Q, from 4.7% estimated previously and 4.5% in 4Q16.

“We are reassessing our full-year real GDP forecast, and the stronger-than-expected 1Q GDP growth suggests that there is room for us to upgrade the forecast.

“For the time being and pending the release of the official GDP data on May 19, we are keeping our real GDP growth forecast of 4.5% for 2017, vs 4.2% in 2016, on:

1.   A stronger recovery in exports, on the back of an improvement in global demand;

2.   A sustained increase in domestic demand, on the back of resilient consumer spending and a pick-up in private investment, aided by a recovery in exports;

3.   A modest rise in public spending due to rising revenue,” it said.