KUALA LUMPUR: BMI, a Fitch Solutions company, has revised downward its forecast for Malaysia’s real gross domestic product (GDP) growth to 4.0 per cent in 2023, from 4.2 per cent previously.
BMI said the weaker-than-expected reading for the second quarter 2023 leaves its previous 2023 growth forecast of 4.2 per cent looking too upbeat, as it suggests that the local economy must grow by an average of 4.1 per cent year-on-year in the second half of this year .
It said further analysis of the latest GDP figures showed an uptick in investment’s contribution to real GDP growth from 0.9 percentage points in 1Q 2023 to 1.1 pp in the second quarter. To illustrate the changes that remain for businesses, Malaysia’s manufacturing purchasing managers’ index came in at 47.8 in July 2023 - the eleventh consecutive month it has been below the 50.0 level, implying contraction.
"Indeed, net exports already removed 0.7 pp off GDP growth in 2Q, extending the -2.3 pp in 1Q. Year-to-date nominal figures further showed exports contracting by an average of 5.0 per cent y-o-y in the first seven months of the year, with a sharp contraction of 14.0 per cent y-o-y in June, although this eased to -13.0 per cent y-o-y in July.
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