Hong Leong Investment Bank Research says downside risks have diminished as global growth has become more synchronised across key economies. (NSTP Pic by Rosdan Wahid)

KUALA LUMPUR: Near-term outlook for manufacturing Industrial Production Index (IPI) remains favourable with continued expansion in forward indicators, said Hong Leong Investment Bank (HLIB) Research.

Besides that, HLIB said downside risks have diminished as global growth has become more synchronised across key economies.

HLIB said IPI growth grew at a faster pace of 6.8 per cent year-on-year (y-o-y), higher than consensus estimate of 5.8 per cent y-o-y.

It said the acceleration in mining (+5.4 per cent y-o-y) offset the moderation in electricity growth (three per cent y-o-y) and manufacturing sector (+7.6 per cent y-o-y).

HLIB said in line with this, it has retained its gross domestic product (GDP) growth projection of 5.4 per cent for 2017 and unchanged overnight policy rate (OPR) for the remainder of 2017.

Public Investment Bank Research (PublicInvest) in a separate note said with all cylinders firing, it has projected Malaysia’s 2017 IPI growth to touch 5.5 per cent from 3.9 per cent recorded in 2016.

It said this will be supported by positive growth across all sectors, led by manufacturing.

It said this, in turn, will be driven by the changing prospects of US, Eurozone and China.

Competitive ringgit and stable commodity prices will give the added impetus, it said.

PublicInvest said it remained sanguine on Malaysia’s outlook with growth projected to reach 5.3 per cent for the year.

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