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Second-quarter GDP growth expected to exceed 4.5%

Malaysia’s gross domestic product (GDP) growth is expected to be higher than 4.5% in the second quarter (2Q) buoyed by a positive business outlook despite the decline in the Purchasing Managers’ Index (PMI).

“We anticipate that the economy will grow better in 2Q19 onwards. In tandem, the latest PMI indicates that the 2Q19 growth would remain below 5% hence there is still room for it to grow higher than 4.5% in the 1Q19. We foresee the full year 2019 GDP growth at 4.9%,” said MIDF Research in a report today.

The research house said the challenging environments is expected to be short-lived as businesses became more optimistic towards the future. The latest PMI data in June indicated that outlook sentiment reached its highest since October 2013.

The optimism is also supported by positive developments in the US-China trade row.

Meanwhile, AmResearch believes the overall economic growth will still be above 4% based on historical comparison.

“Looking at the 1Q19 average (PMI) reading of 47.6, 1Q2019 GDP grew 4.5%. And given that the 2Q19 average PMI is higher at 48.7, we can logically expect 2Q2019 GDP to possibly expand between 4.5% and 5%.”

Malaysia’s Manufacturing PMI eased further in the month of June to 47.8 from 48.8 in May.

AmResearch said the current PMI data suggests that the business operating environment remains a challenge, especially on the export market segment, but businesses are beginning to show positive forward-looking outlook.

Despite the ongoing global uncertainties, especially on trade tensions, we concur with the PMI findings that there are a growing number of firms stepping up their marketing and sales efforts. Firms are also adopting a more stable approach on the employment front.”

  • The Sun Daily