KUALA LUMPUR, Feb 11 (Bernama) -- Malaysia’s gross domestic product (GDP) growth is likely to edge up to 4.7 per cent in the fourth quarter (Q4) of 2018, from the 4.4 per cent reported in Q3, in line with Bloomberg’s market consensus, says United Overseas Bank (Malaysia) Bhd.

The bank said the growth would be mainly driven by domestic private sector spending and exports.

In a statement today, UOB said the services and manufacturing sectors continued to be key contributors to growth.

“Meanwhile, construction was aided by a resumption of government spending and the mining sector by an uptick in crude petroleum and gas production.

“However, the agriculture sector would likely decline further, albeit by a smaller magnitude, amid higher levels of crude palm oil output,” it said.

UOB said regional growth trends, generally, levelled off towards the end of 2018, but there was renewed caution on the global economy due to weaker corporate earnings and slower manufacturing activity, the lack of clarity on US policy and lingering US-China trade tensions.

“The prolonged uncertainty is dampening consumer and business sentiment and thus, posing downside risks to growth,” it added.

UOB said this was reflected in the dovish tone of many central banks that mirrored a shift in the US Federal Reserve’s (Fed) stance.

It said several regional central banks had kept policy rates unchanged after several hikes last year.

“India became the first country to cut rates last week, citing the slower growth environment and tame inflation.

“Although there are growing calls for more policy rate cuts in the region, Bank Negara Malaysia (BNM) kept a neutral tone and cuts in the overnight policy rate (OPR) are only moderately priced in the interest rate swaps,” it said.

UOB maintained its view on the OPR to remain on hold at 3.25 per cent this year.

Meanwhile, it said the US dollar versus ringgit exchange had edged lower to 4.06/07.

“Near term, the greenback against the local note is likely to trade in a lower range between 4.05 and 4.10 before a subsequent recovery towards 4.15 and 4.18 by mid and end-2019, respectively.

“This will be underpinned by the US Fed resuming its rate hikes in June and December,” UOB added.

BNM is scheduled to release the fourth quarter and full financial year 2018 results on Feb 14.

-- BERNAMA