KUALA LUMPUR, Nov 11 (Bernama) -- MIDF Research has upgraded its gross domestic product (GDP) growth forecast for Malaysia to 8.0 per cent for this year from 6.6 per cent previously after the stronger-than-expected expansion of 14.2 per cent in the third quarter (Q3).
Continued improvement in income and positive labour market conditions will continue to support consumption activity in the final quarter of 2022 and into 2023, it said.
“Even with a zero per cent quarter-on-quarter (q-o-q) in the next quarter, the 2022 GDP growth would still be at least 7.7 per cent,’’ it said in a research note today.
However, the research house remains cautiously optimistic as Malaysia’s economic growth may be impacted by external uncertainties.
“New orders and export orders contributed to the deterioration in the manufacturing purchasing managers' index (PMI), indicating signs of slowing demand,” it noted. “Moreover, external demand could slow in the event of a global slowdown amid the sharp rise in borrowing costs following policy tightening by major central banks.’’
MIDF Research said on the domestic front, the outcome of the 15th General Election will determine the magnitude of political risk to the Malaysian economy.
“In the event of a prolonged hung parliament, this may pose an economic risk, particularly on government expenditure, Budget 2023, and the implementation of public policies,’’ the research house added.
In Q3, real exports rose 23.9 per cent year-on-year on the back of robust demand for electrical and electronics goods, petroleum, and palm oil.
“We see significant improvement in services exports of 77 per cent year-on-year, which could be linked to the increased activities in the tourism sector.
“With strong export growth, net exports were larger at RM22.1 billion and grew by 18.7 per cent year-on-year after two consecutive quarters of negative growth,” it said.
Real imports growth surged at a five-quarter high of 24.4 per cent year-on-year, in line with improving domestic economic activities.