Malaysia's Q4 real GDP growth forecast 4.7%

Maybank Investment Bank Research estimates that the real GDP growth for the fourth quarter of 2016 (4Q16) was 4.7% on-year, implying  a 4.3% full-year growth.
The research house said on Monday that this forecast was slightly above its full-year estimate of 4.2%. 
It said the estimate was based on the fact that industrial production growth quickened, index of services slowed, the drop in palm oil output eased, pointing to smaller contraction in agriculture sector, while growth in the value of construction works moderated during the quarter.  
Maybank IB Research noted that the Industrial Production Index (IPI) strengthened to 5.0% on-year in 4Q 2016 on faster growth in manufacturing and mining which offset the moderation in electricity, pointing to firmer growth in manufacturing GDP and mining GDP.
The Index of Services growth eased to 5.9% YoY in 4Q 2016, compared to 6.2% on-year in 3Q 2016, suggesting marginally slower services sector GDP growth last quarter.
Palm oil output narrowed its declines to 7.6% 0n-year, compared to a 14.7% decline in the third quarter, and its high correlation with agriculture sector GDP implies that the sector reported lower pace of contraction in 4Q 2016, the research house said. 
It added that the value of construction works done moderated to 8.1% on-year in 4Q 2016, compared to 10.7% growth in the preceding quarter, signaling tapering growth trends in the construction sector’s GDP.
“Using the above 'supply-side indicators', we estimated 4Q 2016 real GDP growth was 4.7% on-year, implying 4.3% full-year growth which is slightly above our full-year estimate of 4.2%,” it said.

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