Skip to content
  • Group
    • About MARC
    • Leadership
    • Investor Relations
    • Notable Issuances
    • MARC Ratings
    • MARC Solutions
    • MARC Data
    • MARC Learning
    • Careers
  • Services
    • Credit Ratings & Related Assessments
    • Sustainability-Related Assessments
    • Economic & Fixed-Income Analysis
    • Sustainability-Related Advisory
    • Debt Advisory
    • Analytics Consulting Services
    • Subscriptions
    • Data Analytics
    • Credit Reporting
    • Learning Programmes
  • Insights
    • Rating Announcements
    • Research & Analysis
    • Views
    • MARC in the Media
    • Newsfeed
    • Latest@MARC
  • Events & CSR
  • Contact Us
    • Contact Us
    • Service Level Feedback Form
    • Publication Feedback Form
    • Whistleblowing
Menu
  • Group
    • About MARC
    • Leadership
    • Investor Relations
    • Notable Issuances
    • MARC Ratings
    • MARC Solutions
    • MARC Data
    • MARC Learning
    • Careers
  • Services
    • Credit Ratings & Related Assessments
    • Sustainability-Related Assessments
    • Economic & Fixed-Income Analysis
    • Sustainability-Related Advisory
    • Debt Advisory
    • Analytics Consulting Services
    • Subscriptions
    • Data Analytics
    • Credit Reporting
    • Learning Programmes
  • Insights
    • Rating Announcements
    • Research & Analysis
    • Views
    • MARC in the Media
    • Newsfeed
    • Latest@MARC
  • Events & CSR
  • Contact Us
    • Contact Us
    • Service Level Feedback Form
    • Publication Feedback Form
    • Whistleblowing
  • Sign In
  • Subscribe
  • Group

    Group

    The MARC Group of Companies comprises MARC Ratings, MARC Solutions, MARC Data and MARC Learning.

    • About MARC
    • Leadership
    • Investor Relations
    • Notable Issuances
    • About MARC
    • Leadership
    • Investor Relations
    • Notable Issuances
    • MARC Ratings
    • MARC Solutions
    • MARC Data
    • MARC Learning
    • MARC Ratings
    • MARC Solutions
    • MARC Data
    • MARC Learning

    MARC Ratings

    • Rating Guide
    • Rating Process
    • Rating Symbols & Definitions
    • Rating Methodologies
    • Regulatory
    • Lead Managers

    MARC Solutions

    MARC Data

    MARC Learning

    • Careers
    • Careers
  • Services

    Services

    MARC's subsidiaries each provide distinct product offerings and services.

    • Credit Ratings & Related Assessments
    • Sustainability-Related Assessments
    • Economic & Fixed-Income Analysis
    • Credit Ratings & Related Assessments
    • Sustainability-Related Assessments
    • Economic & Fixed-Income Analysis
    • Sustainability-Related Advisory
    • Debt Advisory
    • Analytics Consulting Services
    • Sustainability-Related Advisory
    • Debt Advisory
    • Analytics Consulting Services
    • Subscriptions
    • Data Analytics
    • Credit Reporting
    • Learning Programmes
    • Subscriptions
    • Data Analytics
    • Credit Reporting
    • Learning Programmes
  • Insights

    Insights

    Find the vital information you need and stay up to date with the latest news from MARC.

    • Rating Announcements
    • Research & Analysis
    • Views
    • Rating Announcements
    • Research & Analysis
    • Views
    • MARC in the Media
    • Latest@MARC
    • MARC in the Media
    • Latest@MARC
  • Events & CSR

    Events & CSR

    MARC organises a diverse range of events throughout the year to engage with all stakeholders.

    • MARCares
    • Events
    • MARCares
    • Events
  • Contact Us

    Contact Us

    Let's get the conversation started - Get in touch with us!

    • Contact Us
    • Service Level Feedback Form
    • Publication Feedback Form
    • Whistleblowing
    • Contact Us
    • Service Level Feedback Form
    • Publication Feedback Form
    • Whistleblowing
MARC Online
Subscribe
Menu
  • Group
  • Services
  • Insights
  • Events & CSR
  • Contact Us
Menu
  • Group
  • Services
  • Insights
  • Events & CSR
  • Contact Us
Credit Ratings & Related Assessments
Sustainability- Related Assessments
Economic & Fixed-Income Analysis
Subscriptions
Sustainability- Related Advisory
Debt Advisory
Analytics Consulting Services
Data Analytics
Credit Reporting
Learning Programme

Credit Ratings & Related Assessments

Sustainability- Related Assessments

Economic & Fixed-Income Analysis

Subscriptions

Sustainability- Related Advisory

Corporate & Debt Restructuring Advisory

Analytics Consulting Services

Data Analytics

Credit Reporting

Learning & Customised Programme

  • Insights
  • Latest@MARC
Corporate

MARC Ratings upgrades 2022 GDP growth forecast to 6.5% despite consecutive OPR hikes

View Reports

Contacts

20220908 Chart 1
Posted Date: September 08, 2022

Today, Bank Negara Malaysia (BNM) announced its Monetary Policy Committee's (MPC) decision to increase the overnight policy rate (OPR) by 25 basis points to 2.50%.

The hike, the third in as many MPC meetings, further rolls back part of the monetary support implemented during the worst of the COVID-19 crisis. After the pandemic emerged in early 2020, the MPC had cut the OPR by a cumulative total of 125 basis points from the pre-pandemic level of 3.00%.

The MPC's latest move comes as no surprise given the significant surge in Malaysia's 2Q2022 gross domestic product (GDP) growth pace to 8.9% (1Q2022: 5.0%). With this, GDP growth pace in 1H2022 stood at 6.9%, just a hair's breadth lower than the 7.0% achieved in the same period last year.

With domestic demand expected to remain firm on the back of, among other things, an improving labour market, we are upgrading our full year 2022 GDP growth forecast to 6.5% (2021: 3.1%) from 5.5% previously. Our upgraded forecast remains in line with the central bank's forecast range of 5.3%–6.3%.

We expect the demand-pull side of the inflation equation, given the improving domestic growth outlook, to manifest itself stronger going forward. On the external front, we see the Ukraine-Russia conflict, which has triggered particularly severe disruptions to global markets for critical raw materials, and worsening drought conditions continuing to contribute towards global inflationary pressures.

We have, as such, revised our 2022 inflation forecast upwards to 3.3% from 2.7% previously. This is slightly above BNM's forecast range of 2.2%–3.2%. According to the MPC in its Monetary Policy Statement, it expects inflation to peak in 3Q2022 before moderating thereafter.

Meanwhile, we see the ringgit remaining under pressure in the coming months for reasons that are expected to include: a) aggressive interest rate hikes by a hawkish US Federal Reserve; b) disappointing economic data from a zero COVID–obsessed China that has dampened oil prices; and c) political rhetoric in Malaysia.

Against these evolving backdrops, we expect BNM to remain on a rate tightening path. We foresee the MPC, given its stated preference for measured and gradual monetary policy adjustments to support sustainable economic growth amid price stability, hiking the OPR by another 25 basis points to 2.75% in its November 2022 meeting.

 Chart 1: Third OPR hike in a row    Chart 2: Growth outlook continues to improve 
 20220908 Chart 1    20220908 Chart 2
 Sources: CEIC, MARC Ratings    Sources: CEIC, MARC Ratings
     
 Chart 3: Inflationary pressure rising    Chart 4: Ringgit in a weak mode 
 20220908 Chart 3    20220908 Chart 4
 Sources: CEIC, MARC Ratings    Sources: CEIC, MARC Ratings
     

 

Contacts:
Lyana Zainal Abidin, +603-2717 2912/ norlyana@marc.com.my 
Lee Si Xin, +603-2717 2942/ sixin@marc.com.my 
Quah Boon Huat, +603-2717 2931/ boonhuat@marc.com.my 

You May Also Like To Read

See All
Corporate

MARC Ratings publishes 2021 Lead Managers' League Tables

1 December, 2022

Corporate

MARC's 26th Annual General Meeting: Thriving Through Adversity

13 June, 2022

Corporate

MARC embarks on corporate realignment to gear up for growth

1 December, 2022

See All

Let’s get started.

Subscribe to our mailing list today

Subscribe Now
Group
  • About MARC
  • Leadership
  • Investor Relations
  • Notable Issuances
  • Careers
Regulatory
  • Rating Reviews Summary
  • List of Defaults
  • List of Credit Ratings Published
  • List of Entities on Rating Watch
Services
  • Credit Ratings & Related Assessments
  • Sustainability-Related Assessments
  • Economic & Fixed-Income Analysis
  • Sustainability-Related Advisory
  • Corporate & Debt Restructuring Advisory
  • Subscriptions
  • Analytics Consulting Services
  • Data Analytics
  • Credit Reporting
  • Learning & Customised Programmes
Subsidaries
  • MARC Ratings
  • MARC Learning
  • MARC Data
  • MARC Solutions
Insights
  • Rating Announcements
  • Research & Analysis
  • Views
  • Latest@MARC
  • MARC in the Media
Events
  • Corporate Events
  • Corporate Social Responsibility (CSR)
  • Advertise with MARC
Contact Us
  • Contact Us
  • Service Level Feedback Form
  • Publication Feedback Form
  • Whistleblowing
  • Group
    • About MARC
    • Leadership
    • Investor Relations
    • Notable Issuances
    • MARC Ratings
    • MARC Solutions
    • MARC Data
    • MARC Learning
    • Careers
  • Services
    • Credit Ratings & Related Assessments
    • Sustainability-Related Assessments
    • Economic & Fixed-Income Analysis
    • Sustainability-Related Advisory
    • Debt Advisory
    • Analytics Consulting Services
    • Subscriptions
    • Data Analytics
    • Credit Reporting
    • Learning Programmes
  • Insights
    • Rating Announcements
    • Research & Analysis
    • Views
    • MARC in the Media
    • Newsfeed
    • Latest@MARC
  • Events & CSR
  • Contact Us
    • Contact Us
    • Service Level Feedback Form
    • Publication Feedback Form
    • Whistleblowing
Terms & Conditions
Privacy Notice
Copyright Notice
Whistleblowing
PDPA Notice
© 2023 Malaysian Rating Corporation Berhad. All rights reserved.
Facebook Twitter Linkedin

Join MARC Mailing List

I would like to subscribe this mailing list. Please tick whichever is applicable

I agree/ do not agree (please tick whichever is applicable) to receive future events, conferences or marketing materials from MARC. *

Privacy Notice *

Declaration *