By Emily Chow
KUALA LUMPUR (Reuters) – Malaysia’s economic growth pace rose in the second quarter, helped by slightly stronger exports and manufacturing, a Reuters poll showed.
The median forecast from the poll of 13 economists was for annual growth of 4.8% in April-June, faster than the first quarter’s 4.5% pace.
Individual forecasts ranged from 4.3% to 5.0%.
If the pace tops 4.5%, Malaysia will be the first Southeast Asian country to report an acceleration in growth in the second quarter.
“Malaysia is a notable exception to the export-led GDP slowdown that most of the Asian and global economies have been suffering currently amid intensified global trade war and a technology downturn,” said ING economist Prakash Sakpal.
“This was associated with acceleration of manufacturing growth over the same quarter as was evident from the monthly industrial production figures,” he added.
ING’s forecast for the quarter is 4.8% growth.
In April and again in May, Malaysia’s industrial production rose 4% from a year earlier, the strongest since October, supported by gains in electricity generation and mining. While Malaysia as a large exporter of intermediary goods to China remains vulnerable due to the Sino-U.S. trade war, its exports for the second quarter were marginally higher than a year earlier, supported by demand for palm oil, oil and gas and manufactured goods. Malaysia is Southeast Asia’s third-largest economy, and its major exports include palm oil and liquefied natural gas.
Julia Goh, Malaysia-based economist with UOB Bank, said in a note on Tuesday she expects private consumption remained “resilient” in the quarter, aided by demand for Islamic holidays, private sector bonus payouts and financial assistance to civil servants. UOB predicts 5.0% second quarter data. But Goh said she doubts a growth rebound is sustainable given “intensifying global downside risks tied to trade tensions between major countries, slower Chinese economy, the possibility of a no-deal Brexit and a potential credit default in Argentina.” To try to spur growth, Malaysia’s central bank in May made its first rate cut since 2016, to by 25 basis points to 3.0%.
(Reporting by Emily Chow; Editing by Richard Borsuk)
