Sunday, April 25, 2010

Amresearch wins GDP highest prediction

Friend o mind, Mr Manokaran Mottain, Amresearch's economist goshhh came out as the most bullish econ predictor, here is what he said:
Go Manu! Go Manu! Go Manu! Yeeeehaaaaa!

Real GDP to post 8% this year - strongest since 1996
  • Malaysian economy may have probably expanded at a more rapid pace in 1Q10 – at 9.8% YoY, highest in a decade - with private sector spending by households as well as exports leading the way.
  • Strengthening domestic and external conditions led us to upgrade Malaysia’s economic growth to 8% in 2010 – broadbased recovery expected - versus Bank Negara’s forecast of 4.5%-5.5% and World Bank’s 5.7%.
  • The 6-month smoothed growth rate of the Leading Index stands at 5.2% - suggests favourable economic conditions ahead.
  • With prospects of a disappointing global upswing getting dimmer, real GDP will be sustained at around 6% in 2011.
  • Growth drivers in 2010: Manufacturing sector (+12.3%), led by E&E sector, which represent more than 9% of GDP.
  • Services sector to grow 7.1%, contributing at least 4.1ppts to GDP – led by stronger demand arising from positive wealth effect from the financial markets, stable employment conditions and rising income levels .
  • Private consumption is expected to rise on back of improvements in the labour market, disposable incomes and consumer confidence. We forecast 4.5% growth this year, against 0.8% in 2009.
  • Exports and imports to post double-digit growths of 15% and 16% in 2010 - higher current account surplus of RM125bil or 20% of GDP.
  • Headline inflation is expected to rise 2.5%, in tandem with improving economic conditions and possible adjustments to prices.
  • Given the assumption of stronger economic momentum and higher inflation rates, we reckon year-end target for OPR will be at 3% now – still below neutral levels - it will not choke the recovery process.
  • In this regard, we see the Ringgit at RM3.10 per US dollar by year-end, moving towards its new fair-value, since the tradeweighted index is also a function of GDP and OPR.

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