Based on the month-on-month (m-o-m) declines in the industrial production index (IPI), distributive index (DTI) and crude palm oil (CPO) prices, the research firm estimates that the economy shrank in April versus March’s 5.6% growth rate.

According to the statistics department, the country’s IPI declined 3.3% year-on-year (y-o-y) in April, the first contraction in 20 months.

A decline in IPI signifies that the overall output of industrial goods has decreased, indicating a potential slowdown in economic growth, job opportunities and investment.

In a note today, Maybank IB also suggested that the extended Hari Raya Aidilfitri public holidays on April 21-24 may have contributed to the IPI contraction.

However, GDP grew in May following a rebound in CPO output, which was up 3.9% y-o-y and 26.8% m-o-m.

Maybank IB said its monthly GDP tracker captures sectors and industries that account for 52.5% of GDP.

“The best high-frequency guidance or preview on Malaysia’s economic growth performance remains our quarterly GDP estimates (that we published prior to official quarterly GDP releases) which is based on a more complete set of information,” it said.

MIDF Research, meanwhile, pointed out that economic consumption indicators present a more optimistic outlook of the country’s economy.

“Malaysia’s retail trade growth remained resilient despite inflation concerns and tightening monetary policy factors.

“Retail sales grew by 12.9% y-o-y (in April), marking 15-straight months of double-digit expansion rate,” said MIDF.

While domestic consumption remains strong, MIDF also noted that Malaysia’s leading index (LI) declined slightly in March.

The LI is used to identify significant turning points in the business cycle and where the economy is heading in the near term.

“As a forward-looking indicator, the continued fall in LI at -0.9% y-o-y in Q1 2023 (Q4 2023: -0.8% y-o-y) suggests Malaysia’s growth outlook will soften in (the second half of the year),” it remarked.