KUALA LUMPUR – The performance of Malaysia’s economy in Q4 2021 has led experts at Moody’s Analytics to anticipate the country’s economy expansion in Q1 2022.
The firm has projected a 1.1% expansion for Q1 2022, bolstered by the overall 6.6% growth that Malaysia has seen in the last quarter of 2021.
In a recently released statement, Moody’s stated that benefits from last year’s strong external position has carried forward and extended through the early months of 2022.
Aside from that, it stated that a surge in private consumption due to the relaxation of COVID-19 restriction measures and the shifting policies towards people living with the virus has likely contributed to the growth in the March-quarter.
In addition to that, Moody’s also believe that Bank Negara Malaysia (BNM) will likely maintain its overnight policy rate (OPR) at 1.75% during the central bank’s meeting in May.
With regards to the Asia-Pacific economy, the firm stated that April’s inflation results are expected to increase overall in Asia.
The consumer price index (CPI) for India has possibly increased to 7.3% year-on-year (y-o-y) in April from the 7.0% in March. This would be attributed by spiking food prices as well as higher energy expenses.
In a similar vein, Indonesia’s CPI is foreseen to increase from 2.6% to 3.0% y-o-y in April this year as well.
Meanwhile, Kenanga Research also anticipates that BNM would keep the OPR at 1.75%.
It added that the US Dollar Index (DXY) will remain elevated at approximately 104.0 while the ringgit may continue to trade in a range between 4.36 and 4.38.
“The USD may continue to be strengthened by a series of prospective hawkish statements from the United States Federal Reserve speakers along with increasing price pressures,” Kenanga stated.
Despite that, it said that a stronger-than-expected domestic macroeconomic reading, particularly for Q1 2022’s gross domestic product, could limit the depreciation of Malaysia’s Ringgit.
BNM has scheduled its third monetary policy meeting to be on May 11 and the central bank will announce the Economic and Financial Developments for Q1 2022 on May 13.
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