KUALA LUMPUR, Feb 15 (Bernama) -- RHB Research has forecast that Bank Negara Malaysia (BNM) would likely keep its overnight policy rate (OPR) stable at 3.25 per cent throughout 2019.
On Thursday, the central bank released Malaysia’ s gross domestic product (GDP) 2018 figure of 4.7 per cent in the fourth quarter of 2018 (4Q18) and the same quantum for the full year.
In a note today, RHB Research said BNM in its base case forecast, expects respectable real GDP growth in 2019.
“It seems comfortable with the improvement in the 4Q18’s GDP growth. We, however, believe that underlying growth remained unexciting as it was mainly driven by one engine of growth, namely private consumption,” it added.
On maintaining the OPR, RHB Research said the risk, however, remained on the downside.
The research firm said in the event the global economy slips into a recession and the Malaysian economy is badly affected, BNM will still have policies in its tool kit to cushion the impact.
“On Feb 14, BNM held a briefing with analysts for the release of 4Q18’s real GDP growth.
“We gather from the briefing that BNM seems comfortable with the improvement in growth to 4.7 per cent year-on-year during the quarter, a rebound from +4.4 per cent in 2018 third quarter.
“The improvement was mainly driven by a recovery in net exports due to a pick-up in export growth, while import growth remained subdued.
“Nevertheless, we share BNM’s view that risk of a global recession remains low and the global economic growth cycle, although at a late cycle in our view, will likely be extended again, as global central banks are sensitive to any signs of downward pressure,” RHB Research said.