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KUALA LUMPUR – RHB Investment Bank Bhd has maintained its 2023 gross domestic product (GDP) growth forecast at 5.0% year-on-year (YoY) following better-than-expected first quarter results.
In a note, the investment bank said the balance of risks to its 2023 GDP forecast is tilted to the upside.
“Despite the slowdown in external demand, we think that the risks to economic growth itself are limited.
“Our view is mainly predicated on the resilience in domestic demand supported by robust labour demand conditions and household income, and the labour market has limited exposure to the risks from the external front,” it said.
Malaysia’s economy grew by 5.6% in the first quarter of 2023 driven by resilient domestic activities.
RHB Investment Bank expects domestic demand to remain solid for the year, lifted by robust labour market conditions and household income, continuation of large-scale infrastructure projects, as well as a pick-up in tourism activities.
It said the trade momentum is expected to stay soft in the first half of 2023 and has maintained its view that the trade momentum is likely to show signs of improvement by early in the second half of 2023.
On the overnight policy rate (OPR), the investment bank has kept its projection of peak OPR at 3.25%, with one more hike expected for the remainder of 2023. – Bernama, May 13, 2023