KUALA LUMPUR, July 31 — Malaysian Rating Corporation Bhd (MARC) has maintained its 2023 Gross Domestic Product (GDP) growth forecast for the country at 4.2 per cent, as it expects growth in the second quarter (2Q) to be only slightly lower than that in the previous quarter.
The credit rating agency said Malaysia’s GDP growth of 5.6 per cent in the first quarter (1Q) of 2023 was higher than expected, while year-on-year contractions in exports were smaller in May and June — at -0.9 per cent and -14.1 per cent, respectively — compared to April’s -17.6 per cent.
“Taking into consideration the latest Purchasing Managers’ Index reading with a mild contraction, 2Q 2023 GDP (growth) is likely to moderate and be slightly lower than the level seen in 1Q 2023, rather than fall significantly,” it said in a statement today.
Meanwhile, MARC forecast inflation, which stood at 3.3 per cent in 2022, to soften to 2.8 per cent this year and 2.5 per cent in 2024, with some upside risk.
“Overall, the narrative of global risk factors together with the easing inflation trend should provide Bank Negara Malaysia the scope to keep the Overnight Policy rate unchanged at 3.0 per cent for the remainder of the year,” it added.
The agency said that going into 2024, the global economy is expected to improve, premised on a firmer recovery in China following accommodative government policy and more dovish monetary policy by central banks.
“For the Malaysian economy, stronger external demand coupled with firmer domestic demand on continued recovery in the tourism sector will underpin a stronger GDP growth of 4.5 per cent in 2024,” it added. — Bernama
