Maybank Investment Bank Berhad’s (Maybank IB) 4Q 2023 GDP advanced Gross Domestic Product (GDP) estimate (based on Oct-Nov 2023 data) showed a sustained economic growth of +3.4% YoY (3Q 2023: +3.3% YoY), slower QoQ to +3.5% (3Q 2023: +5.2% QoQ) and full-year growth estimate of +3.8% (2022: +8.7%) which is marginally below the Bank’s and official estimates of +3.9% YoY and +4.0% respectively.
Mixed 4Q 2023 Sector growth performance
Maybank’s IB’s 4Q 2023 GDP advanced estimate is based on Oct-Nov 2023 data/indicators covering services, manufacturing, mining, agriculture and construction sectors. The estimated growth of +3.4% YoY last quarter was driven by pick up in agriculture (4Q 2023: +1.2% YoY; 3Q 2023: +0.8% YoY) and rebound in mining (4Q 2023: +3.7% YoY; 3Q 2023: -0.1% YoY) amid slower services (4Q 2023: +4.7% YoY; 3Q 2023: +5.0% YoY) and construction (4Q 2023: +2.5% YoY; 3Q 2023: +7.2% YoY) as well as continued “flattish” manufacturing (4Q 2023: +0.1% YoY; 3Q 2023: -0.1% YoY).
Services sector growth was underpinned by wholesale & retail trade, transport & storage and business services sub-sectors as well as the tourism-related food & beverages and accommodation sub-sectors.
Manufacturing sector performance was affected by contractions in the predominantly export-oriented industries like electrical, electronic and optical products as well as petroleum, chemical, rubber and plastic products, which offset growth in the largely domestic-oriented industries such as vegetable and animal oils & fats, food processing, non-metallic mineral products as well as basic and fabricated metal products.
Agriculture sector posted firmer growth on higher production of oil palm, rubber, livestock and other agriculture products. Mining GDP rebounded on increased output of both natural gas and crude oil & condensate.
Construction growth slowed as expansions in civil engineering and residential activities were negated by declines in non-residential and specialised construction activities.
To note, Maybank IB’s monthly GDP tracker pointed to average +2.8% YoY growth in Oct-Nov 2023 (link to report Malaysia Monthly GDP Tracker, Nov 2023), based on less but high-frequency published dataset released ahead of the advanced estimate quarterly GDP i.e. monthly Industrial Production Index (IPI – covering manufacturing, mining and electricity output), Distributive Trade Index – covering wholesale, retail and motor vehicle trade volumes) and CPO output. These together account for 52.5% of GDP.
Therefore, the Bank’s monthly GDP tracker figure for Oct-Nov 2023 is understandably lower than the 4Q 2023 advanced estimate of +3.4% YoY, which is also based on Oct-Nov 2023 dataset but on a broader group of indicators on economic sectors/activities available to the Department of Statistics.
Sub-4% full-year 2023 growth
Based on the 4Q 2023 GDP advanced estimate growth, the economy expanded by +3.8% last year (2022: +8.7%), marginally below our and official estimates of +3.9% YoY and +4.0% respectively, and down from +8.7% in 2022, reflecting slower growth in services (2023E: +5.4%; 2022: +10.9%), manufacturing (2023E: +0.8%; 2022: +8.1%) and mining (2023E: +1.0%; 2022: +2.6%) vs pickups in agriculture (2023E: +0.5%; 2022: +0.1%),and construction (2023E: +5.8%; 2022: +5.0%).
Actual 4Q 2023 and full-year GDP will be released on 16 Feb 2024.
