RHB Research Institute Sdn Bhd said Malaysia’s real gross domestic product (GDP) growth recorded a stronger growth of 5.6% year-on-year (y-o-y) in 1Q17, up from 4.5% in 4Q16, on the back of stronger external activities and domestic demand.

In a an economic update today, the research house said that going forward, it expects the strong growth of the external sector to continue spilling over to the domestic side in the quarters ahead. “Nonetheless, we expect the real GDP growth to moderate in 2Q and 2H 2017, as the strong export growth tapers off.

“Still, we are revising our 2017 real GDP forecast upwards to a growth of 4.8% (2016: 4.2%) from our previous estimate of 4.5%, on account of:

1.   A stronger-than-expected recovery in exports, particularly in 1Q17, that could boost overall economic activity;

2.   A pick-up in domestic demand, as higher export growth would trickle down to an improvement in consumer spending and private investment; and

3.   Modest increase in public spending and investment,” it said.

TEM