KUALA LUMPUR: Alliance Bank has revised upwards Malaysia's growth outlook for the second quarter from 5.2 per cent to 5.5 per cent on the back of the higher-than-expected economic activities across the board in the second quarter.
It also lifted the outlook for the full year from 5.0 per cent to 5.2 per cent.
On the second quarter, the research house said the services sector index may have grown stronger by 7.0 per cent year-on-year, registering the fastest pace of growth since the first quarter of 2015.
“Improved external demand has led to stronger manufacturing activity – production was faster than expected at 6.2 per cent during the second quarter, led by electrical and electronics (E&E) sub – sector production,”it said in a note.
The strong trend seen in manufacturing production reflected the exports data seen during the quarter. Exports grew 20.6 per cent, whilst imports expanded 19.1 per cent.
Rising imports trend suggest that future exports would still be stronger in the coming months, it added.
“On domestic demand side, several leading indicators point to higher private consumption during the quarter.
“These include retail sales which was up 11.5 per cent while the Malaysian Institute of Economic Research consumer sentiments rebounded to 80.6 - highest recorded since the fourth quarter of 2014 although still remain below the 100-point parity level.”
Imports of capital goods slowed down markedly during the second quarter, trimming the optimism.
“We expect private investment growth would have slowed down during the quarter, but still higher than levels seen a year ago.”
