KUALA LUMPUR, Nov 10 — Kenanga Investment Bank Bhd has revised its forecast for Malaysia’s 2021 manufacturing production upwards to 8.5 per cent from 7.0 per cent projected earlier, driven by an expected surge in domestic demand.
The revision was made following the rebound in the country’s Industrial Production Index (IPI) for September, where it grew by 2.5 per cent year-on-year after two months of decline.
“Growth in manufacturing output is expected to sustain its momentum in the fourth quarter of 2021 (Q4 2021) as Malaysia transitions into the endemic phase of Covid-19.
“This will be supported by an expected release of pent-up domestic demand and sustained growth in external demand towards the end of the year,” it said in a note today.
However, the research firm said downside risks remain, given the prolonged global supply chain disruptions.
It expects the country’s Q3 2021’s gross domestic products (GDP) growth to register a decline of 1.4 per cent as a result of the nationwide movement control measures to stem the resurgence of Covid-19.
The Q3 2021 GDP results will be announced on Friday.
“Meanwhile, we have retained our 2021 GDP growth forecast at between 3.5 per cent and 4.0 per cent, and we project 2022 GDP growth to further expand to between 5.5 per cent and 6.0 per cent,” it added.
Meanwhile, AmBank (M) Bhd expects Malaysia to record a GDP contraction of 1.5 per cent in Q3 2021 against the previous estimate of -2.4 per cent, on the back of the improved Covid-19 pandemic management, healthy external growth and surging commodity prices.
“With the better performance expected in Q4 2021 which would be supported by the reopening of the borders, overall economy could now reach 4.0 per cent for the full year, driven by an improvement of Q4 GDP, estimated to be at 1.9 per cent,” it said.