Friday, May 12, 2017

Industrial Output Maintains Relatively Strong Pace in March

Economic Research
12 May 2017

Economic Update

The Industrial Production Index (IPI) was sustained at 4.6% YoY in March, from +4.7% in February, on the back of a rebound in mining output and resilient manufacturing growth. We envisage real GDP to pick up to slightly more than 5% YoY in 1Q, from +4.7% estimated previously and +4.5% in 4Q16. We are reassessing our full-year real GDP forecast, and the stronger-than-expected 1Q GDP growth suggests that there is room for us to upgrade the forecast. For the time being and pending the release of the official GDP data on 19 May, we are keeping our real GDP growth forecast of 4.5% for 2017, vs +4.2% in 2016, on:

1.   A stronger recovery in exports, on the back of an improvement in global demand;
2.   A sustained increase in domestic demand, on the back of resilient consumer spending and a pick-up in private investment, aided by a recovery in exports;
3.   A modest rise in public spending due to rising revenue.

Economist:  Vincent Loo Yeong Hong  | +603 9280 2172
Economist:  Aris Nazman Maslan  | +603 9280 2184

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