Member access

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
Recommend:
0

-- 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

Recommend :
0
React to this article
Latest news
Date Title
<1m ago Marinus Pharmaceuticals, Inc. Announces Pricing of Initial Public Offering
<1m ago AERCAP HOLDINGS N.V. : to Release Second Quarter 2014 Financial Results on August 12, 2014
<1m ago The 2014 ASSEMBLY Show Educational Program to Include a Keynote Presentation, Half Day Workshops, and Exhibit Hall Seminar Series
<1m ago HILTON WORLDWIDE : to replace hotel room key with mobile phone
<1m ago MITSUI ENGINEERING & SHIPBUILDING : ClassNK collaborates on engine monitoring research
<1m ago SAMSUNG ELECTRONICS : Future dims for Samsung after poor quarterly earnings
<1m ago SCANA : Results of Operations and Financial Condition, Financial Statements and Exhibits (form 8-K)
<1m ago MURPHY OIL : DE : Results of Operations and Financial Condition, Financial Statements and Exhibits (form 8-K)
<1m ago MARRIOTT : Hotel in 280-metre tower in China for Marriott
<1m ago SIEMENS : sees 28% hike in third quarter profit
Latest news
Advertisement
Hot News 
GFI : Law Firm Kirby McInerney LLP Investigating Potential Claims on Behalf of GFI Group Inc. Stockholders
ARDEN PARTNERS : Posts Loss As Fee Income Hit By Two Pulled Deals
AFREN : Oil Explorer Afren Suspends Top Executives
HYDER CONSULTING : Agrees To Be Acquired by Arcadis At 39% Premium
RENEWABLE ENERGY : Findings from National University of Defense Technology Update Knowledge of General Mathematics (An Improved Dispatch Strategy of a Grid-Connected...
Most Read News
1d ago JPMORGAN CHASE : Announces $30 Million for Small Business Network Growth
1d ago BANCO MACRO : Argentina fails to reach debt agreement, default imminent
1d ago AMC NETWORKS : wants stake in BBC America - source
1d ago MOLECULAR MEDICINE : Researchers from Huazhong University of Science and Technology Provide Details of New Studies and Findings in the Area of Molecular Medicine (Growth...
1d ago BANCO ESPIRITO SANTO : BES seeks capital as key staff suspended over massive losses
Most recommended articles
8h agoDJMARKET SNAPSHOT : U.S. Stocks: Futures Drop On Jobless Claims
3m ago DIRECTV : Soccer World Cup helps DirecTV net more subscribers
5m ago U.S. jobless claims up, wage growth starting to push higher
8m ago AstraZeneca steps up push into cancer immunotherapy
11m ago European shares sink again, dollar holds strong
Dynamic quotes  
ON
| OFF