KUALA LUMPUR, Feb 11 — Maybank Investment Bank Research (Maybank IB) has estimated the gross domestic product (GDP) growth for the fourth quarter (4Q) 2019 to moderate to 3.8 per cent year-on-year (YoY) based on drops in mining and agriculture, plus a slowdown in manufacturing.
This is despite a pick up in services and construction.
In a research note today, it said demand-side indicators such as retail trade index, capital goods imports and trade surplus pointed to a slowdown in the domestic demand and net external demand.
“Our current 2020 growth forecast is 4.4 per cent with downward revision risk in view of the fallout from the 2019 novel coronavirus (nCoV) outbreak.
“Demand-side optics not great as indicators point to a slowdown in both domestic demand and net external demand last quarter. Retail trade index growth moderated, suggesting a further slowdown in real private consumption,” said Maybank IB.
It said the real gross fixed capital formation should remain in the red, given the continued decline in capital goods imports.
“The government total expenditure growth decelerated sharply to 3.1 per cent YoY in 4Q 2019 vs 25.3 per cent YoY in 3Q 2019, implying a weak performance in real government consumption expenditure last quarter after the 1.0 per cent YoY growth in 3Q 2019.
“Trade surplus growth slowed sharply, pointing to slump net external demand growth. At the same time, further declines in volumes of exports and imports point to continued lacklustre performances in both real exports of goods and services and real imports of goods and services,” it said.
Meanwhile, MIDF Research is forecasting the local economy to expand at a moderate pace of 4.3 per cent YoY in 4Q19, leading the country’s full-year GDP growth to 4.5 per cent from its previous target of 4.6 per cent.
“Global trade war remains a downside risk factor particularly for Malaysia’s external trade and industrial activities during the third and final quarters.
“We view 4Q19 GDP to be the weakest in 2019 due to weak external trade and moderate domestic activities,” it said in a research note yesterday.
Going forward, MIDF Research is of the view that 2020 will remain a challenging year due to global protectionism, political uncertainty in the US and the novel coronavirus effects. — Bernama