KUALA LUMPUR (XINHUA) – Economists yesterday lifted Malaysia’s 2022 full-year growth forecast after the country achieved stronger than expected growth in the third quarter.
Hong Leong Investment Bank Research said in a note, following the strong third-quarter gross domestic product (GDP) posting and better-than-expected economic releases thus far, it revised upwards Malaysia’s 2022 GDP annual growth forecast to 8.2 per cent from 6.5 per cent previously.
“Although we still expect growth to moderate in the fourth quarter, following the absence of base effect and weakening external demand, the economy is expected to continue to be supported by domestic demand amid the improving labour market situation,” said the research house.
However, following the darkening global outlook, it downgraded Malaysia’s 2023 GDP to 4.2 per cent from 4.5 per cent previously. The growth forecast is still in line with the official forecast range of four per cent to five per cent.
Affin Hwang Investment Bank is also revising Malaysia’s real GDP growth forecast higher to 7.5 per cent estimated for 2022.
“With Malaysia’s real GDP posting a broad-based performance in the third quarter, despite the slower pace of the global economy in the near term, we believe the domestic economy will continue to be supported by healthy labour market conditions, as well as the steady recovery in tourism-related industries,” said the bank.
It said similar trends have also appeared in other ASEAN economies with a strong recovery in tourism-related sectors due to the re-opening of international borders.
For 2022 as a whole, it expects Malaysia’s economy to be driven by internally generated growth, especially from private consumption.
Based on its estimate, domestic demand is expected to grow significantly by nine per cent year on year for 2022 from 1.9 per cent in 2021.
However, it believed growth momentum will start to moderate from the fourth quarter of 2022 and into 2023, thus, it downgraded the GDP growth for 2023 from 4.7 per cent to 3.7 per cent.