Malaysia: Analysts see 2022 GDP growth at 8.2%-8.4%

KUALA LUMPUR (Feb 9): Malaysia’s 2022 gross domestic product (GDP) is forecast to have expanded by 8.4% year-on-year (y-o-y) by CGS-CIMB Research, and 8.2% by Hong Leong Investment Bank (HLIB) Research, following indications for the manufacturing, mining, services and construction sectors.

In anticipation of the official fourth-quarter (4Q2022) GDP data release on Friday (Feb 10), CGS-CIMB estimated that the Malaysian economy expanded by 6% y-o-y in the quarter, while HLIB estimated a 6.8% growth. 

Nonetheless, both research firms noted that their predictions still showed a slowdown from 3Q2022, which experienced a 14.2% y-o-y growth, with the indicators pointing to a slower expansion in the final quarter of the year.

“Barring the dissipating low-base effect and interest rate increases by Bank Negara Malaysia concurrent with the high-inflation-rate environment recorded in 4Q2022, Malaysia’s economic activity showed moderation as compared to 3Q2022,” CGS-CIMB said. 

“In addition, the ongoing shortage of foreign workers and softening of global demand may have also dampened growth, in our view. That said, we believe the continued increase in tourist arrivals may have supported services activity,” it added. 

Meanwhile, HLIB said 4Q2022 growth is expected to be weighed down by moderation in most sectors, including manufacturing and services. On the demand side, it said, growth is anticipated to be buoyed by private consumption, albeit at a slower pace.

HLIB also maintained its expectations for GDP growth to moderate to 4% in 2023, in view of a slower global outlook, more moderate domestic demand, and the absence of the low-base effect.

“The outlook for the global economy has unexpectedly brightened in recent weeks, due to the resilience of several major economies, easing of energy cost, as well as China’s faster-than-expected reopening,” HLIB said.

“Nevertheless, risks to the outlook remain tilted to the downside on account of persistent inflationary pressures, possible escalation of geopolitical tensions, and tighter financial conditions.”

Meanwhile, CGS-CIMB’s chart shows that it expects GDP growth to moderate to 4.4% in 2023.