The 2Q22 GDP growth will be positive and slightly higher than previous 1Q22 growth of 5%, underpinned by growing domestic demand.
Prof Dr Ahmed Razman Abdul Latiff said this, adding that referring to the latest macroeconomic indicators provided by the Department of Statistics Malaysia, all indicated positive growth in terms of export value, positive current assets and trade balance, high foreign direct investment (FDI) and lower unemployment rate.
“In addition, Singapore and Indonesia also registered higher 2Q GDP growth compared to 1Q due to greater regional economic activities this year,” the Putra Business School Associate told The Malaysian Reserve.
RHB Investment Bank Bhd economist Chin Yee Sian and associate research analyst Wong Xian Yong said the research firm maintained its GDP growth projection at 6.1% for 2Q22 in view of the robust economic indicators released.
They pointed out that the June’s Industrial Production Index (IPI) registered a higher growth of 12.1% YoY and the continued expansion in the S&P Global Malaysia Manufacturing Purchasing Managers Index signals a stable manufacturing sector performance going forward.
Similarly, they said the Producer Price Index, which measures the costs of goods at the factory gate, has stayed elevated at double-digits growth, albeit at a slower momentum.
Meanwhile, the Malaysian Institute of Economic Research (MIER) highlighted that the country’s real GDP growth in 2Q22 needs to perform much better than 1Q22 and it must register at least 6% YoY growth.
In a recent report, the research firm said the anticipated stronger growth is likely achievable on the basis of all the positive signs and prevailing macro indicators.
It noted that Malaysia’s economic growth had gained momentum and private sector dynamism was “clearly back on track”.
MIER opined that nevertheless, the country has to find ways and means to further support these favourable developments, avoiding to a large extent restrictive measures that inhibit the growth process, especially in the medium and longer term.
“There are still short-term weaknesses in the macroeconomic fundamentals that are expected to persist in the second half of this year (2H22) and also next year.
“These include continuing net outflows of portfolio and ‘other investments’ by domestic residents, rising cost of living, and elevated public sector and household debts,” it said.
While there is a less optimistic scenario in 2H22, MIER said the economic recovery process is still expected to continue, albeit at a moderate scale, as reflected by continuing strong growth in the IPI, steady expansion in exports of goods and services (amid rising imports), and continued inflows of FDI, among other factors.
