KUALA LUMPUR, Sept 11 — Real gross domestic product (GDP) growth is likely to improve by five per cent year-on-year in the third quarter (Q3) of this year, faster than +4.3 per cent recorded in Q2.

In a note today, RHB Research said the likely improvement was attributed to a sustained growth in domestic demand and aided by an improvement in external demand for the country’s exports.

It said industrial production strengthened to 7.6 per cent year-on-year in July after rising to a revised +3.7 per cent in June and compared with +3.3 per cent in May.

“This is reflected in a broad-based increase in manufacturing, mining and electricity output during the month,” it said.

RHB Research said domestic demand was expected to remain a key driver of economic growth.

The growth was envisaged to outpace that of overall GDP growth in the second half of 2013, underpinned by projects implementation of various economic programmes, it said.

“As a whole, we expect GDP to gain by 4.7 per cent this year, albeit slower compared with 5.6 per cent in 2012,” it said.

Meanwhile, it said, July manufacturing sales rebounded to grow by 3.8 per cent from a year ago, after slipping by two per cent in June from 1.25 per cent in May, boosted by recovering exports and resilient domestic demand.

“In line with higher sales, manufacturers turned less cautious and retrenched fewer workers during the month,” it said.

Going forward, it said, the global economy continued to show signs of sustained recovery and growth was gathering pace for an upturn in the later part of 2013 and in 2014.

“This will likely help lift the country’s exports towards the end of the year,” it said. — Bernama