PETALING JAYA: The country’s economic prospects remain good despite the softer growth in loans for December and rising external macro headwinds, says Hong Leong Investment Bank (HLIB) Research.
It expects gross domestic product (GDP) to grow by 4.9% year-on-year (y-o-y) this year and for Bank Negara to maintain the overnight policy rate at 3%.
“The global economic outlook remains pressured by uncertainties due to the unpredictable developments surrounding US President Donald Trump’s inflationary policies and a more hawkish Federal Reserve path. We remain vigilant on these external risks,” the research house said in a report following softer monetary indicators for last December.
Loan growth moderated in the month to 5.5% y-o-y from a 5.8% y-o-y rise in November due to softer household and business loans.
Household loan growth was weighed down by lower disbursements in passenger cars and residential properties while business loans moderated following softer growth among non-small and medium enterprises (SMEs) in the month, HLIB Research noted.
SME loans were broadly sustained by higher loans for investment-related purposes in the month while gross issuance of corporate bonds eased to RM8.1bil worth from RM13.2bil in November.
Loan applications and approvals also declined in December.
