News

Maybank IB expects shallower 3Q20 recession

by BERNAMA / pic by TMR FILE

MAYBANK Investment Bank Bhd (Maybank IB) expects the third and fourth quarter of this year’s real gross domestic product (GDP) to contract by -3.5 per cent year-on-year (YoY) and -1.9 per cent YoY, respectively after the economy shrank in the second quarter.

This would give a full-year recession of -5.4 per cent, the research house said in a note today.

Maybank IB said consumer spending indicators in the third quarter 2020 (3Q20) have improved, indicating a relatively better real private consumption in the quarter.

It said both household loan applications and approvals as well as domestic credit card transactions have rebounded in 3Q20.

“The acceleration in household loans growth in the three months up to September 2020 reflect the impact of stamp duty, Real Property Gains Tax and sales tax exemptions under the short-term economic recovery package the National Economic Recovery Plan (PENJANA) to spur home and auto sales over the following 6-18 months.

“Hence, the pick up in loans for purchases of residential property and for purchases of passenger vehicles,” it said.

Maybank IB said a risk to the forecast, especially the fourth quarter 2020, is the new wave of surge in COVID-19 cases since late-September 2020 that led to the imposition of targeted lockdowns.

“This include the Conditional Movement Control Order (CMCO) currently enforced over the combined period of Oct 13-Nov 13, 2020 in the states of Sabah and Selangor and the Federal Territories of Kuala Lumpur, Putrajaya and Labuan which makes up 47 per cent of the country’s GDP,” it added.

Zukri

Recent Posts

Credit Suisse’s collapse reveals some ugly truths about Switzerland for investors

For decades, Switzerland has sold itself as a haven of legal certainty for bond and…

2 hours ago

The 11 days of turmoil that brought down four banks and left a fifth teetering

The speed with which four banks collapsed — and one continues to struggle — has…

2 hours ago

SVB’s Greg Becker was Silicon Valley’s money man for 30 years, until suddenly he wasn’t

Early on March 9, as SVB Financial Group’s stock began its death spiral, Chief Executive Officer…

2 hours ago

Google opens Bard AI chatbot to the public

Alphabet Inc.’s Google is granting the public access to its ChatGPT competitor, the conversational AI…

2 hours ago

West Bank settlers win Israel parliament vote

JERUSALEM – Israel's settler movement celebrated Tuesday after parliament annulled part of a law banning them…

5 hours ago

Thai election to be held May 14: commission

BANGKOK – Thailand's general election will be held on May 14, authorities confirmed Tuesday, as…

5 hours ago