Several economists have raised their gross domestic product (GDP) forecasts for Malaysia following better-than-expected growth for the second quarter ended June 30.
Malaysia's economic growth for the second quarter rose by an unexpected 5.4% year-on-year underpinned by an expansion in manufacturing and robust domestic demand.
GDP growth for the first quarter was revised to 4.9% from 4.7%, while growth for the first half of the year stood at 5.1% compared with the same period a year ago.
Compared with the first quarter, GDP expanded by 3%.
Hong Leong Investment Bank's (HLIB) research unit said that following the strong-than-expected second quarter data, it had raised its full-year 2012 GDP forecast to 5% (previously: 4.5%).
For the second half of 2012, HLIB Research expected GDP growth to dip to 4.5% year-on-year in the third quarter (dragged by subdued trade and manufacturing and higher base in the third quarter of 2011) before improving to 5.1% year-on-year in the fourth quarter, yielding an average of 4.8% year-on-year (first half: 5.1% year-on-year).
“We are still positive that line-up of the Economic Transformation Programme projects for the second-half and 2013 could still provide a strong support to GDP growth despite external uncertainty,” said HLIB Research.
According to Bloomberg, Goldman Sachs also raised Malaysia's GDP growth predictions to 4.6% from 3.8% for 2012, and to 5.3% from 5.2% for 2013.
Meanwhile, CIMB Investment Bank Bhd economic research head Lee Heng Guie said given the steady performance in the first half, he had raised the 2012 growth estimate to 5%, from 3.8% previously.
“However, this still implies a slower growth of 4.5% to 5% in the second half versus 5.1% in the first half,” said Lee in a report.
Lee warned that external headwinds still warranted caution as they remained hurdles to Malaysia's export growth.
Meanwhile, Maybank Investment Bank (IB) Research said its 2012 and 2013 growth forecasts of 4.4% and 5.1% respectively were under review.
“Provisionally, we expect 2012 growth to be around 5%, which implies a slightly slower growth of 4.8% in the second half as the global purchasing managers index in July signals that the global economy hence external demand will remain soft in the third quarter.”
Maybank IB Research said domestic demand would continue to be well supported by initiatives to sustain consumer spending, policies and measures to spur investments, and the roll-out and progress of big ticket infrastructure projects and capital expenditures in industries like oil, gas and energy.