MBSB IB Upgrades GDP Forecast, Sees OPR Remaining At 2.75 Pct
KUALA LUMPUR, July 9 (Bernama) -- MBSB Investment Bank Bhd (MBSB IB) has revised up its 2026 gross domestic product (GDP) growth forecast to 4.5 per cent, underpinned by steady economic growth and well-contained inflation.
The positive outlook is expected to provide room for the central bank to keep the Overnight Policy Rate (OPR) unchanged at 2.75 per cent, allowing for a prolonged rate pause.
In a note today, MBSB IB said the revised GDP forecast is higher than its previous projection of 4.2 per cent, although overall growth is still expected to moderate from the 5.2 per cent expansion seen in 2025.
The forecast remains within BNM’s projected GDP growth range of 4.0 to 5.0 per cent for 2026.
MBSB IB added that the worst-case scenario from the West Asia conflict appears to have passed.
“The forecast upgrade captures stronger-than-expected first-half momentum, driven by a recent surge in export performance and steady domestic demand.
“Robust domestic fundamentals continue to underpin Malaysia’s resilience against external market volatility. However, the national growth trajectory remains exposed to geopolitical risks and external uncertainties,” it said.
However, the investment bank said, beyond heightened geopolitical tensions, the higher tariffs imposed by the United States may pose downside risks to external trade.
Meanwhile, echoing MBSB IB’s sentiment, RHB Investment Bank Bhd (RHB IB) in its research note expects the OPR to remain unchanged at 2.75 per cent throughout 2026 and monetary policy is likely to remain data-dependent in the upcoming MPC meetings, with decisions guided by the outlook for economic growth and underlying inflation trends.
It said resilient economic fundamentals and manageable inflationary pressures support a broadly stable policy stance, with no immediate need for policy adjustments.
Nonetheless, it said lingering uncertainties surrounding geopolitical tensions and unexpected oil supply disruptions among major oil-producing nations could put upward pressure on global energy prices.
“Should inflation turn out to be higher and more persistent than expected, exceeding the official forecast range of 1.5 per cent to 2.5 per cent, the possibility of a 25-basis point rate hike cannot be entirely ruled out,” RHB IB added.
OCBC Bank said the BNM’s assessment of economic growth reflected greater confidence, given the strong incoming activity data.
It said that BNM had noted that latest developments point towards resilient growth in the second quarter, driven by sustained domestic demand and stronger-than-expected export performance.
“May industrial production growth, released today, further corroborated this assessment, coming in at 8.4 per cent y-o-y versus 8.2 per cent in April, taking the average growth for April and May to 8.3 per cent y-o-y versus 4.0 per cent in the first quarter of 2026 (1Q 2026)," it said.
-- BERNAMA