Citi : Higher mfg, power output hint at stronger 2Q GDP for Malaysia

Citi : Higher mfg, power output hint at stronger 2Q GDP for Malaysia
Business & Markets 2013
Written by Chong Jin Hun of theedgemalaysia.com
Wednesday, 12 June 2013 14:36


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KUALA LUMPUR (June 12): Malaysia latest industrial output numbers may offer a "sequential boost" to the country's second quarter gross domestic product (GDP) numbers, according to Citi Research.

In a note, Citi said the rise in April manufacturing and electricity output may support the local economy during the quarter.

"With election uncertainties behind us, implementation of previously-approved projects could keep investment growth robust in 2H13.

"This together with continued intermediate goods imports for re-stocking will place some near-term pressure on the current account and net exports will likely remain a drag until exports do pick up, likely also in 2H13," Citi said.

Yesterday, the Statistics Department said the nation's industrial production index (IPI) rose 4.7% in April from a year earlier. In monthly terms, the IPI rose 3.9%.

Growth in manufacturing and electricity output had supported the IPI's rise as mining production fell.

Citi has maintained its GDP growth forecast for Malaysia at 5.2% this year . According to the firm, higher capacity from investment surge should keep demand-pull inflation pressures at bay.

City expects headline inflation to come in below 3% which should allow Bank Negara Malaysia to maintain interest rates at current levels for the rest of the year.