11 May 2010 | By: Mohamed Hairul Borhan

A poll of 10 economists has indicated that Malaysia’s Industrial Production Index (IPI) is likely to post strong double-digit growth in March. Industrial output is expected to expand by 12.9 per cent year-on-year (y-o-y), up from just 4.9 per cent y-o-y in February.

The economists polled attributed the expected expansion to a more favourable base effect for the month and also the continued improvement in Malaysia’s external demand.

Figures from the latest March external trade data have shown that exports grew 36.4 per cent y-o-y, compared with 18.4 per cent y-o-y in February. Imports also increased tremendously, expanding by 45.3 per cent in March, up from 27.9 per cent a month earlier.

The positive estimate has also spilled over to manufacturing sales, which is expected to take a cue from the March IPI. Analysts have predicted that manufacturing sales for March is expected to rise by 21 per cent from a year earlier, up from 17.3 per cent y-o-y in February.

The IPI is a good proxy of Malaysia’s economic growth as it represents about 40 per cent of the country’s total economy.