KUALA LUMPUR, Aug 12 — Hong Leong Investment Bank (HLIB) Research is upgrading its 2014 full-year forecast on Malaysia’s gross domestic product (GDP) growth to 5.7 per cent from 5.5 per cent.
This is given the stronger-than-expected second quarter (Q2) industrial production index (IPI) growth.
“With two successive quarters of strong GDP growth of more than 5.5 per cent year-on-year (y-o-y), we now expect Bank Negara Malaysia to continue with its rate normalisation in September by hiking 25 basis points (bps),” HLIB said in a research note today.
The research house also said it does not expect the central bank to bring the Overnight Policy Rate above its estimated neutral level of 3.50 per cent, unless incoming financial data continues to suggest strong household loans growth, with the loan-deposit growth gap remaining wide after a cumulative 50 bps hike.
Earlier, Malaysia’s IPI growth hit an 11-month high of 7.0 per cent y-o-y for June, beating market expectations of a 5.0 per cent gain. Growth was higher in all segments, led mainly by the manufacturing sector. — Bernama
