Friday 29 Mar 2024
By
main news image

KUALA LUMPUR (Aug 7): Standard Chartered Bank expects Malaysia’s economy to grow 4.2% year-on-year (y-o-y) for the second quarter of 2015 (2Q15), lower than the gross domestic product (GDP) growth of 5.6% in 1Q15, due to the impact of the goods and services tax that was implemented in April.

In a note today, the bank said consumer and business sentiment had probably weakened in 2Q15 compared with the preceding quarter, but manufacturing and mining production were likely stronger in 2Q15 due to positive net external demand.

“Malaysia registered an average trade surplus of RM6 billion, versus RM7.1 billion in 1Q15, likely making a positive net export contribution to growth and supporting the current account surplus in 2Q15,” said Standard Chartered.

Going forward, the bank expects a modest rebound in GDP growth in the latter two quarters of 2015, but said if growth slows significantly below 4%, Bank Negara Malaysia is expected to loosen monetary policy to boost growth.

The GDP data for 2Q15 is expected to be announced on August 13.

On the industrial production (IP) figures for June, which will be announced on August 10, the bank forecasts a 4.7% y-o-y expansion, slightly higher than the 4.5% increase seen in May.

“Mining production likely supported the headline print. It grew 9% y-o-y in May, supported by an 18.8% increase in crude oil production. June IP was likely supported by resilient externally oriented production as China’s growth stabilised in the month,” it said.

For the latter half of the year, Standard Chartered expects muted IP growth, in view of dampened global growth.

 

      Print
      Text Size
      Share