Economy Researchers optimistic of 1Q GDP growth after March trade data

by **Cals** Thu 08 May 2014, 19:13

Economy Researchers optimistic of 1Q GDP growth after March trade data

Business & Markets 2014

Written by Bernama

Thursday, 08 May 2014 12:19

KUALA LUMPUR (May 8): Research firms are generally optimistic on Malaysia's economic growth in the first quarter of 2014 amid a steady rise in exports.

"Based on the latest trade statistics, we envisage net export contribution to real GDP at 7.9 per cent in the first quarter of 2014," said AmResearch in a note today.

The trade balance contributed 6.3 per cent to the country's gross domestic product (GDP) in 2013, it added.

Malaysia’s gross export growth moderated to 8.4 per cent year-on-year to RM65.03 billion in March, ending three consecutive months of double-digit expansion.

The trade surplus remained high at RM9.6 billion although slightly lower from February's trade surplus of RM10.4 billion.

"Going forward, rising exports are expected to remain supportive of growth.

In nominal terms, the trade surplus could amount to RM104.2 billion in 2014," it said, adding it projects full-year GDP for 2014 at 5.1 per cent.

Alliance Research said it is maintaining its first quarter GDP forecast of around 5.5 per cent, against 5.1 per cent in the fourth quarter of 2013. It forecasts full-year growth for 2014 at 5.0 per cent.

"Our exports and imports forecasts for 2014 remain unchanged at around 5.0 per cent and 9.0 per cent respectively, given the expected recovery in external demand from advanced economies," it said.

Meanwhile, Hong Leong Investment Bank reiterated that real GDP growth for 2014 would remain steady at 5.0 per cent year-on-year, with positive contribution from net exports offsetting more moderate domestic demand growth.

It expects the central bank to hold the overnight policy rate (OPR) steady at 3.0 per cent throughout 2014 and to delay a rate hike to early 2015.-- BERNAMA.