Moody’s: Malaysia’s economy grew 5.7% in Q1

Published: Tuesday May 14, 2013 MYT 11:07:00 AM

KUALA LUMPUR: Moody’s Analytics forecasts Malaysia’s economy grew at a slower pace of 5.7% in the first quarter ended March 31, 2013 versus the average survey of 5.5% due to weaker exports growth but it sees the domestic economy remaining strong.It said on Tuesday Malaysia’s growth pace moderated in the opening months of 2013 after a strong end to 2012 on slower exports which contracted on-year for a third straight quarter, reflecting weak global demand for the country’s key electronics goods.”Rising imports indicate net exports subtracted from growth: We expect this week’s GDP report to show the economy expanded 5.7% in the first quarter, slower than the fourth quarter’s 6.4%,” it said.

However, Moody’s said the moderation did not worry it “because the domestic economy remains strong”. It pointed out rising capital imports and the recent victory by the Barisan Nasional ensured the continuation of an infrastructure investment drive, which would help the economy grow strongly in coming quarters.

“Job growth, low unemployment, and minimum wage increase support consumer confidence and spending. The external sector is expected to slowly recover in line with the global economy, contributing to growth in the second half of the year.

“Solid growth and steady inflation will allow the central bank to keep the policy rate on hold at 3% for the rest of 2013 and into 2014, in contrast to the easing monetary stance witnessed across much of Asia,” said Moody’s.

Source: The Star

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