KUALA LUMPUR: Maybank Investment Bank Research said it expects 1Q10 real gross domestic product (GDP) growth at a robust 10% year-on-year (y-o-y), after industrial production growth in March came in ahead of expectations at +14.1% y-o-y
(February 2010: +4.9% y-o-y; Maybank IB estimate: +13.4% y-o-y; Consensus: +13.4% y-o-y).

It said that month-on-month, all components registered double digit expansion, and that on a quarterly basis, overall production grew by 11% y-o-y and 1% quarter-on-quarter.  

"This bodes well for 1Q10 real GDP figures to be released earlier than expected by Bank Negara Malaysia on May 13, 2010, together with the decision on the Overnight Policy Rate (OPR).  

"We expect 1Q10 real GDP growth to come in at a robust 10% y-o-y.  The central bank will use this indication of entrenched recovery to further normalise domestic interest rates by raising the benchmark interest rate by another 25bps to 2.5% after the 25bps hike to 2.25% on March 4," it said in a note Wednesday, May 12.