KUALA LUMPUR, Aug 10 ― RHB Research Institute has maintained its 2018 gross domestic product (GDP) growth forecast for Malaysia at 5.2 per cent ― easing from 5.9 per cent last year ― on a slowdown in external trade, which is partly cushioned by resilient domestic demand.
In a note, economist Vincent Loo Yeong Hong said it maintained the lower growth forecast as industrial activities grew at the slowest pace in four years, with the Industrial Production Index growth moderating to 1.1 per cent year-on-year (y-o-y) in June.
“The slowdown was mainly due to a sharp fall in the mining sector’s production but mitigated by improvements in manufacturing and electricity production numbers.
“As it stands, mining activity output fell by a wider margin of 9.4 per cent y-o-y in June, after contracting 0.5 per cent in May, led by a sharp fall in natural gas output, although crude oil output declined at a softer pace,” he said.
Loo said the electricity and manufacturing output picked up in June to three per cent and 4.5 per cent y-o-y, respectively (April: +2.6 per cent and +4.1 per cent), due to broad-based improvement in output growth across the sectors except petroleum, chemical, rubber and plastic, transport equipment, and other manufactures.
“Separately, a moderation in services and construction activities to 6.7 per cent and 5.3 per cent, respectively, in the second quarter (Q2) (Q1: 7 per cent and 5.9 per cent) suggests lower-than-expected GDP growth in Q2 2018 of five per cent y-o-y, slowing slightly from the +5.4 per cent registered in Q1,” he added. ― Bernama
Source: The Malay Mail Online