The Bank Negara Malaysia logo outside the Sasana Kijang Center, which houses the bank's facilities, in Kuala Lumpur, Malaysia, on Friday, May 13, 2022. Malaysia’s economy grew at a faster-than-expected pace in the first quarter of the year as activity picked up with the easing of virus restrictions. Photographer: Samsul Said/Bloomberg
OPR watch
ATTENTION will be on Bank Negara Malaysia’s (BNM) third monetary policy committee meeting of the year, where economists widely expect the overnight policy rate (OPR) to remain unchanged at 2.75%.
BNM last adjusted the OPR in July 2025, cutting the rate by 25 basis points to 2.75%.
According to a Bloomberg poll, all seven economists surveyed unanimously expect no change to the OPR at 2.75%.
UOB Global Economics & Markets Research expects BNM to look through current transitory inflation pressures while closely monitoring external risks to domestic growth and demand.
Hence, the central bank is likely to maintain a wait-and-see stance, keeping the OPR unchanged at 2.75%.
The Hongkong and Shanghai Banking Corp Ltd also expects BNM to keep its OPR steady at 2.75%, supported by resilient economic data.
Apex Securities maintained its view that BNM will keep the OPR unchanged at 2.75% through 2026 to support growth.
It added that the extent of spillovers from elevated crude oil prices into broader inflation, alongside the strength of domestic demand, will remain key policy considerations.
BNM is also scheduled to announce its international reserves as at April 30 this week.
Meanwhile, S&P Global Malaysia manufacturing purchasing managers’ index for April is expected to be announced today.
1Q26 GDP
INDONESIA, Hong Kong, and the Philippines are set to release their first-quarter gross domestic product (GDP) data this week.
Hong Kong’s 1Q26 GDP is projected by Bloomberg at 1.3% quarter-on-quarter (q-o-q) and 4.1% year-on-year (y-o-y), while UOB forecasts 3.5% y-o-y, compared with 1% q-o-q and 3.8% y-o-y in 4Q25.
ING expects the Philippines GDP growth to recover to 4.3% y-o-y, driven largely by favourable base effects and a modest pick-up in government spending.
However, it noted that consumption growth is likely to remain subdued as unemployment edges higher.
On the industry side, weak construction activity should continue to weigh on growth, while services activity remains relatively resilient.
Meanwhile, Bloomberg estimates Indonesia’s 1Q26 GDP to contract by 0.97% q-o-q while expanding 5.40% y-o-y.
UOB forecasts 5.2% y-o-y, compared with growth of 0.86% q-o-q and 5.39% y-o-y in 4Q25.
Inflation risks
SEVERAL Asia-Pacific countries, including Vietnam, Indonesia, South Korea, Thailand, and Taiwan, are set to announce their April consumer price index (CPI) data.
Bloomberg estimates Vietnam’s April CPI to show a 4.6% y-o-y inflation, slightly lower than the 4.65% recorded in March.
It also projects Indonesia’s CPI data to reflect a 0.32% month-on-month (m-o-m) increase and a 2.66% y-o-y inflation rate, down from 0.41% m-o-m and 3.48% y-o-y in March.
Core CPI in Indonesia is forecast to grow by 2.47% y-o-y, slightly lower than the 2.52% in March.
Meanwhile, ING anticipates that Taiwan will show further signs of rising inflationary pressure in April, following a limited pass-through from higher energy prices in March due to the Iran conflict.
It noted that South Korea’s consumer prices are expected to accelerate as surging oil prices start to impact the costs of other goods and services.
