Malaysia's IP growth moderated in February. On a seasonally adjusted m/m basis, industrial production fell by 0.1% in February after contracting 1% in January. Within the details, growth in manufacturing edged down while mining sector output improved slightly.
This follows weaker growth in exports in February, partly on the back of lower commodity prices and supply side disruptions. Overall, momentum in remains positive, given IP growth averaged 6.1% in the first two months.
According to Barclays, the GDP growth in Q1 2015 to have slowed modestly relative to Q4 2014, as the drag from the sharp decline in energy prices and stagnant palm oil prices results in a negative terms of trade shock.
Nonetheless, the growth is expected to remain supported by decent service sector growth and the front loading of consumption before the implementation of the GST from April 2015.
"BNM continues to expect growth to remain steady, averaging 4.5-5.5% in 2015. We forecast 2015 growth at 4.5%, and with a slower performance in 2H 2015, relative to 1H", said Barclays on Friday.
