Malaysia may grow at 4.7% next year

Malaysia's industrial production in September was better than expectation. The manufacturing and mining activity also beat the analysts' expectation. On a seasonally adjusted m/m basis, industrial production recorded a strong growth rate of 2.4%. 

Whereas, in a quarterly basis, the industrial output posted  4.5% growth in Q3, which was 4.33% in previous quarter. Service sector, in contrast, posted slow growth rate of 4.1% in Q3, which is poor performance since Q2 13.

"Taken together, stronger-than-expected growth in manufacturing offset weakness in services and kept our tracking estimate of Q3 GDP growth at 4.7%. We continue to forecast growth of 5.0% for 2015, with H1 growth at 5.3%. We did lower our 2016 growth forecast to 4.7% from 5.3%", estimates Barclays.

BNM is believed to be remain moderately dovish and sees risks centred on the external environment. The central bank may keep its bank rate unchanged till 2016 due to weaker MYR and sluggish growth rate, foresees Barclays.