The nation’s economy saw slower growth the fourth quarter of 2022 in its Industrial Production Index (IPI), Volume of Services Index and Construction Works Value, but higher in Crude Palm Oil (CPO) output.
A research report by Maybank Investment Banking Group, released today (Feb 9) which stated that based on these indicators, it’s estimated real GDP grew by +6.0% in 4Q 2022 (3Q 2022: +14.2% YoY), giving a full-year growth of +8.5%.
The group expects the economy to expand by a slower +4.0% in 2023.
“The slower growth factors include a slower Industrial Production Index (IPI) growth (4Q 2022: +4.1% YoY; 3Q 2022: +12.2% YoY; Dec 2022: +3.0% YoY; Nov 2022: +4.8% YoY) reflected slower manufacturing (4Q 2022: +4.0% YoY; 3Q 2022: +13.4% YoY; Dec 2022: +3.0% YoY; Nov 2022: +4.8% YoY) and mining (4Q 2022: +6.2% YoY; 3Q 2022: +8.6% YoY; Dec 2022: +4.1% YoY; Nov 2022: +6.1% YoY) plus decline in electricity (4Q 2022: -0.5% YoY; 3Q 2022: +9.0% YoY; Dec 2022: -1.1% YoY; Nov 2022: +0.7% YoY),” it said.
Manufacturing growth was pulled down by the slower growth in both export oriented industries (4Q 2022: +4.2% YoY; 3Q 2022: +10.6% YoY; Dec 2022: +2.7% YoY; Nov 2022: +5.1% YoY) and domestic-oriented industries (4Q 2022: +3.5% YoY; 3Q 2022: +20.6% YoY; Dec 2022: +3.8% YoY; Nov 2022: +4.3% YoY), reflecting lower growth in Computer, Electronics & Optical Products (4Q 2022: +10.6% YoY; 3Q 2022: +18.8% YoY; Dec 2022: +7.6% YoY; Nov 2022: +14.1% YoY), Chemicals & Chemical Products (4Q 2022: +1.7% YoY; 3Q 2022: +4.3% YoY; Dec 2022: +0.4% YoY; Nov 2022: +4.9% YoY), Food Processing Products (4Q 2022: +6.4% YoY; 3Q 2022: +9.2% YoY; Dec 2022: +3.4% YoY; Nov 2022: +8.1% YoY) and Basic Metals (4Q 2022: +0.1% YoY; 3Q 2022: +10.5% YoY; Dec 2022: -3.0% YoY; Nov 2022: +1.4% YoY).
Slower mining output growth reflected deceleration in natural gas (4Q 2022: +7.5% YoY; 3Q 2022: +13.5% YoY; Dec 2022: +3.3% YoY; Nov 2022: +8.2% YoY) offsetting the pickup in crude oil & condensate (4Q 2022: +3.5% YoY; 3Q 2022: +20.6% YoY; Dec 2022: +5.1% YoY; Nov 2022: +3.1% YoY).
Manufacturing production and mining output quarterly trends portend dips in manufacturing GDP and mining GDP last quarter.
Growth in Distributive Trade Index (DTI) slowed (4Q 2022: +9.9% YoY; 3Q 2022: +26.0% YoY; Dec 2022: +9.5% YoY; Nov 2022: +9.9% YoY) reflecting trends in volumes of retail trade (4Q 2022: +19.2% YoY; 3Q 2022: +29.5% YoY; Dec 2022: +17.4% YoY; Nov 2022: +18.3%), wholesale trade (4Q 2022: +0.8% YoY; 3Q 2022: +7.1% YoY; Dec 2022: +1.1% YoY; Nov 2022: +0.5% YoY) and motor vehicles trade (4Q 2022: +7.1% YoY; 3Q 2022: +142.5% YoY; Dec 2022: +9.7% YoY; Nov 2022: +10.3% YoY).
At the same time, last quarter’s Services Index moderated to +11.7% YoY from +23.0% YoY in 3Q 2022, pointing to slower services GDP.
Meanwhile, Construction Works Value eased to +15.7% YoY vs +23.2% YoY in 3Q 2022 indicating deceleration in construction sector GDP. But CPO output rose +11.7% YoY in Dec and +6.3% YoY 4Q 2022 vs +2.8% YoY in Nov 2022 and +2.7% YoY in 3Q 2022 signalling firmer agriculture GDP.
Maybank IBG expects a single-digit economic GDP growth in the coming months which persisted in January 2023, taking cue from the downtrend in manufacturing purchasing managers index or PMI.
