CGS-CIMB anticipates Malaysia’s real GDP in 4Q21 had expanded weaker than anticipated as the consumption rebound was not strong, it said in a note.
It said that base on the available datasets, which cover more than 80% of GDP, it estimates that the Malaysian economy may have expanded 4.1% yoy in 4Q21, rebounding from 4.5% yoy contraction in 3Q21 and lifting the full growth to 3.3%yoy in 2021.
The research house said that the pace of growth was, however, weaker than its previous expectations of an increase of 5.0% yoy for 4Q21 and 3.5% for 2021.
” We see weakness in government services as a key downside risk to our 4.1% forecast for 4Q21,” the research house said. The 4Q21 GDP data will be released on 11 Feb 2022 (Friday).
The research house said that the pace of recovery remained uneven across sectors as factors such as flash floods in late-Dec 2021, a shortage of foreign workers and raw materials, as well as inflationary pressures, likely affected the recovery momentum at the end of 2021.
It said that the Manufacturing index, a subset of Industrial Production Index (IPI), increased 8.4% yoy in Dec, slowing from +11.3% yoy in November while Index of Services (IoS) – a measure of private services performance – gained only 3.0% yoy, and 2.3% qoq on a seasonally adjusted (sa) basis, in 4Q21, as distributive trade performance (+1.4% yoy and -4.6% qoq sa) was not as strong as expected
CGS-CIMB said that theperformance in the agriculture sector in 4Q21 may finally turn around for the first time since 1Q21, following a 5.8% yoy increase in CPO production, marking the first yoy increase in five quarters. Nevertheless, the yoy rebound was driven primarily by the low base effect, as CPO output contracted 2.6% qoq amid the still acute labour shortage. That said, delays in foreign worker intake have led to a tight squeeze in palm oil output in 1Q22.
