KUALA LUMPUR (Aug 28): MIDF Research has maintained its 2023 gross domestic product (GDP) growth forecast for Malaysia at 4.2%, with further moderation in the third quarter of calendar year 2023 (3QCY2023).

In a note on Monday (Aug 28), the research house said Malaysia’s leading index (LI) declined 2.1% in June 2023 by recording 109.8 points, as compared to 112.1 points in the previous year, indicating a moderate economic performance in the fourth quarter of 2023, citing the Department of Statistics Malaysia.

MIDF said the contraction was underpinned by the decline in real imports of other basic precious and other non-ferrous metals, and real imports of semiconductors.

It said that on a month-on-month (m-o-m) basis, LI reduced by -0.5% m-o-m (May 2023: +1.7% m-o-m).

The research house said the monthly decline stemmed from a contraction in five out of seven components, notably the number of housing units approved (-0.5% m-o-m) and real imports of semiconductors (-0.4% m-o-m).

“Separately, the coincident index (CI) rose by +1.6% y-o-y (year-on-year), [a] steady expansion for [an] almost two-year run.

“However, CI contracted on a m-o-m basis by -0.9% (May 2023: +2.4% m-o-m).

“The continued decline in LI indicated moderation in the growth outlook, especially considering the continuous sluggishness in external trade performance,” it said.