Healthy prints from flash Q3 GDP – UOB

Senior Economist Julia Goh and Economist Loke Siew Ting at UOB Group review the recently published advanced readings for the Q3 GDP in Malaysia.

Key Takeaways

For the first time, Malaysia released an advanced 3Q23 GDP estimate last Fri (20 Oct). It is based on the first two months (Jul-Aug)’s available data (monthly economic indicators) to estimate the real economic performance by production approach for the quarter. The preliminary result showed that real GDP grew by 3.3% y/y in 3Q23, marking a marginal improvement from 2.9% in 2Q23. Actual 3Q23 GDP numbers will be released on 17 Nov alongside the current account data.  

The 3.3% advanced GDP estimate for 3Q23 is in line with our preliminary forecast of 3.5%. Real GDP growth averaged 3.9% in Jan-Sep 2023 (Jan-Sep 2022: +9.2%), reaffirming our full-year growth projection of 4.0% and the Ministry of Finance (MOF)’s revised growth target of ~4.0% for 2023. We expect a higher growth of 4.6% in 2024 (MOF est: 4.0%-5.0% or mid-point forecast of 4.8%), assuming a moderate soft landing scenario globally despite heightened uncertainties. Other positive catalysts for domestic growth include an expansionary Budget 2024 and initiatives outlined under the New Industrial Master Plan 2030, National Energy Transition Road, and Mid-Term Review of 12th Malaysia Plan.

 The advanced 3Q23 GDP signaled moderate growth that is below par and would not support a move to hike rates in Nov. Moreover, headline inflation hit a 2 ½ year low of 1.9% in Sep. The next and final monetary policy meeting for this year is on 1-2 Nov.