Chief economist Suhaimi Ilias said this was following Bank Negara Malaysia’s (BNM) accommodative monetary policy process which began with the 25 bps increment in May.

He is expecting BNM to announce a 25 bps hike at this week’s monetary policy meeting and another 25 bps by the fourth quarter 2022, and a further 50bps in H1 2023.

“Our estimation is every 25 bps hike will basically shave real gross domestic product growth by 0.2% points spread over 12 months.

“And the implications of increasing the OPR include the raising of mortgage repayment by 3%,” he said at a virtual Maybank IB H2 2022 market outlook briefing on Monday.

Suhaimi said BNM would increase the OPR due to growing domestic demand and rising core inflation rate.

He said Maybank IB has revised upwards its inflation rate forecasts for this year to 3.4% from 2.7% previously, and to 4.1% from 2.5% for 2023.

“This was because we have incorporated higher prices of food items like cooking oil and chicken starting this month following the higher ceiling price for standard whole chicken and the removal of the price subsidy for bottled cooking oil as well as the assumption of a fuel subsidy review next year,” he added.