Log in
Login
Password
Remember
Lost password
Become a member for free
Sign up
Sign up
Settings
Settings
Dynamic quotes 

4-Traders Homepage  >  News

News

Latest NewsCompaniesMarketsEconomy & ForexCommoditiesHot NewsMost Read NewsRecomm.Business LeadersVideosCalendar 

Malaysia's 3rd-Quarter Economic Growth Tops Forecast

11/16/2012 | 07:05am US/Eastern

-- Malaysia's third-quarter GDP rises 5.2% on year, beating market forecast

-- Central bank governor says domestic demand to support growth

-- Central bank governor expects full-year economic growth to be at top end of or exceed 4%-5% forecast

-- Central bank unlikely to adjust policy rate

(Recasts the first paragraph, adds context in the second paragraph, central bank governor's comments in the fourth and ninth paragraphs, analyst's comment in the last paragraph.)

 
   By Abhrajit Gangopadhyay 
 

KUALA LUMPUR--Malaysia's economy grew faster than expected in the third quarter from a year earlier, buoyed by robust domestic demand stemming from populist spending ahead of general elections, although weakness in sequential growth weighed.

The data came hours after neighboring Singapore said its economy shrank more than estimated over the same period, suggesting Southeast Asian economies with large domestic markets are more resilient than their counterparts with smaller populations at a time when demand from the U.S., Europe and China is falling in tandem with slowing growth and rising debt.

Data from Bank Negara Malaysia Friday showed economic growth in Southeast Asia's third-largest economy grew 5.2% in the three months ended Sept. 30, above the 4.8% median forecast of 19 economists polled earlier by Dow Jones Newswires. However, it expanded at a slower pace than the upwardly revised 5.6% growth for the second quarter.

"Domestic demand is expected to continue to be the anchor of growth, supported by the expansion in private consumption and investment," Central Bank Gov. Zeti Akhtar Aziz said at a news conference after the data release.

Still, a wobbly global economy will weigh on overall growth prospects in the months to come as exports will remain under pressure, she added.

Trade-dependent Singapore said full-year economic growth could come in at 1.5%, the low end of its estimate. Indonesia's economy, Southeast Asia's largest, grew 6.17% in the third quarter, the slowest pace since the first three months of 2010.

Malaysia, on the other hand, is banking on populist spending ahead of general elections that must be held early next year to support domestic demand. Higher wages and bonuses for civil servants as well as cash handouts to thousands of low-income earners have helped spur consumption. Heavy spending to develop the country's infrastructure under its Economic Transformation Program also helped boost public investment.

Ms. Zeti said she expects full-year economic growth to be at the top end, or even higher than the 4%-5% range forecast by the central bank.

"At the prevailing level of the overnight policy rate, monetary conditions remain supportive of economic activity," Ms. Zeti said, suggesting there is no need for the central bank to ease monetary policy to further stimulate growth.

The central bank, which reviews rates six times a year, has held the policy rate at 3% for nine consecutive rate reviews.

Benign inflation also aids the central bank's current stance.

The consumer price index--Malaysia's primary gauge of inflation--rose 1.3% in September, easing from 1.4% in August.

Economists widely expect the central bank to hold the policy rate steady well into 2013 unless the global economic situation worsens sharply.

"(There) is no urgency to cut (policy interest rate) because of external threat," said RHB Research's chief economist, Peck Boon Soon, adding that Malaysia's 2012 growth will likely continue to hover around 5% even as he expects further deceleration in the final quarter. Malaysia's economy grew 5.1% in 2011.

Write to Abhrajit Gangopadhyay at abhrajit.gangopadhyay@dowjones.com

React to this article
Latest news
Date Title
12:56p DANDRIT BIOTECH USA : Amendments to Articles of Inc. or Bylaws; Change in Fiscal Year (form 8-K)
12:56p RESEARCH AND MARKETS : Respiratory Distress Syndrome - Active Pharmaceutical Ingredients Insights 2015-2016
12:55p NANOBIOTIX : starts Phase I/II clinical trial in liver Metastasis and Hepatocellular Cancer with its lead product NBTXR3
12:55p PACIFIC DRILLING : PACD makes Houston Chronicle 100’s top companies
12:55p A2A : Montenegro: EPCG approves 2014 financial statements and the distribution of dividends
12:55p FINDINGS FROM UNIVERSITY OF CALIFORNIA IN PLANT ECOLOGY REPORTED (PRODUCTIVITY-EFFICIENCY TRADEOFFS IN TROPICAL GALLERY FOREST-SAVANNA TRANSITIONS : ...
12:55p NZD/USD Downside Targets Remain Favored on Bearish Formation
12:54p Axway Expands File Transfer Capabilities to Support Digital Business Initiatives
12:54p Patent Issued for Process for Positioning an Assembly Tool on the End of an Articulated Arm and Device for Its Implementation
12:54p Caltex buy will not inflate pump prices: Z Energy (Caltex buy will not inflate pump prices)
Latest news
Advertisement
Hot News 
SPEEDY HIRE : Dealt Triple Blow As Results To Miss Expectations (REPEAT)
GRAHAM : Completes Spin-off of Cable ONE
BETTER CAPITAL PCC : Reports Contrasting Results For 2009 And 2012 Cells
XENON PHARMACEUTICALS TO HOST CONFERENCE CALL AND WEBCAST TODAY AT 9 : 00 a.m. Eastern Time to Discuss TV-45070 Phase 2b Study in Osteoarthritis Pain
RADA Electronic Industries is Awarded a Contract for the Upgrade and Production of a UAV Avionic Unit
Most Read News
08:29a ROYAL DUTCH SHELL A : Makes Investment Decision On Appomattox Project
06/30 PENTAIR : shares jump on news that Trian Fund has targeted stock
11:30a ACE buys upmarket Chubb in biggest ever insurance takeover
06/30DJBrookfield Approaches Australia's Asciano With $6.8 Billion Offer
06/30DJWILLIS-TOWERS WATSON : A Merger of Equals--Not Exactly
Most recommended articles
12:55p NZD/USD Downside Targets Remain Favored on Bearish Formation
12:49p Thiam gets to work at Credit Suisse as new team takes shape
12:49p EURO ZONE FINANCE MINISTERS END CALL ON GREECE : Dijsselbloem
12:48p UK property shares live up to safe-haven tag in volatile world
12:48p No Eurogroup on Greece planned before Sunday referendum