Jan 2023 saw slower growth in Industrial Production Index (Jan 2023: +1.8% YoY; Dec 2022: +2.8% YoY), Distributive Index (DTI) (Jan 2023: +8.6% YoY; Dec 2022: +9.5% YoY) and Crude Palm Oil output (Jan 2023: +10.1% YoY; Dec 2022: +11.7% YoY). Inputting these indicators Maybank Investment estimates the monthly GDP grew +5.3% YoY in Jan 2023 (Dec 2022: +8.3% YoY; 4Q 2022: +7.0% YoY). In this respect, the house forecast a full-year real GDP growth of 4.0% (2022: +8.7%).
IPI growth moderated as subdued manufacturing and a decline in electricity outweighed the pickup in mining output. Moderation in manufacturing growth was seen across export-oriented industries such as Machinery & Equipment, Computer, Electronics & Optical Products, and Electrical Equipment as well as domestic-oriented industries such as Fabricated Metal Products except for Machinery & Equipment Leather & Related Products, and Beverages.
Meanwhile, the pickup in mining output growth was driven by higher production of both crude oil & condensate and natural gas. growth in DTI slowed for the seventh consecutive month amid “flattish” wholesale trade and moderation in retail trades’ double-digit growth despite firmer motor vehicle trade. CPO output also eased to +10.1% YoY in Jan 2023.
Numbers were also affected by the calendar effect following the Lunar New Year holidays in Jan 2023, hence the MoM declines in IPI and DTI. However, accounting for LNY holidays, the seasonally adjusted MoM data also showed declines in IPI and DTI, suggesting underlying weakness beyond the calendar/seasonal effect.
Inputting these indicators into its monthly GDP tracker, Maybank Investment Bank estimates the monthly GDP grew +5.3% YoY in Jan 2023 (Dec 2022: +8.3% YoY; 4Q 2022: +7.0% YoY) and expects economic growth to decelerate to +4.0% in this year from +8.7% expansion last year.
