Malaysia's IPI growth to remain high until May, says PIVB

KUALA LUMPUR: The exceptionally high Industrial Production Index (IPI) growth recorded in April may persist until May before beginning to taper off and normalise from June onwards, said Public Investment Bank Bhd (PIVB).

"Demand for industrial products may remain strong in the immediate term thanks, among others, to global pandemic conditions, structural changes in the global telecommunication industry and gradual economic openings in major economies -- a boon for manufacturing and mining goods.

"Electricity component is also expected to rebound despite the reversion to the Movement Control Order (MCO) thanks to the decision to allow essential businesses to remain open though with strict standard operating procedures (SOPs) amid reduced capacities," the research firm said in a note today.

Malaysia's IPI surged 50.1 per cent year-on-year (y-o-y) in April driven by a broad-based expansion across all components.

This was also spurred by a favourable base effect as output tanked sharply last year (-32.1 per cent in April 2020) due to the full month impact of lockdown measures from MCO 1.0.

PIVB said the outlook for IPI would be further supported by the rapid COVID-19 vaccination drive which would push Malaysia and ASEAN peers to reach herd immunity by year-end.

"This will be further topped by massive policy support to the tune of RM380 billion and accommodative monetary environment which is expected to continue until year-end," it added.

-- BERNAMA