Senior Economist Julia Goh and Economist Loke Siew Ting at UOB Group assessed the latest release of Q3 GDP figures.
Key Quotes
“Real GDP rose at a slower pace of 4.4% y/y in 3Q19 (from 4.9% y/y in 2Q19), in line with market consensus but above our estimate (4.1%). Year-to-date, GDP rose 4.6% in Jan-Sep”.
“Private consumption was the prime driver, which grew 7.0% and contributed 4.1% pts to headline GDP in 3Q19. Other positive contributors were government consumption and net exports. All key sectors expanded except for mining and construction”.
“Our preliminary estimates suggest that GDP growth could pick up to 4.5% in 4Q19 with higher seasonal spending and accelerated government spending. A turnaround in the mining sector could also alleviate the drag on growth. As such, we maintain our full-year growth forecast of 4.6% in 2019 and 4.4% in 2020″.
“Given the slower trend growth below Malaysia’s potential output of 4.8% – 5.0%, we have penciled in a 25bps cut in the Overnight Policy Rate (OPR) to 2.75% in 1Q20. This is to safeguard domestic growth amid lingering trade uncertainties and muted investments”.
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