Malaysia GDP slows to 4.1 pct y/y in Q1, misses forecast

by **Cals** Wed 15 May 2013, 22:08

Malaysia GDP slows to 4.1 pct y/y in Q1, misses forecast
Business & Markets 2013
Written by Reuters
Wednesday, 15 May 2013 18:18

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KUALA LUMPUR (May 15): Malaysia's economy grew 4.1 percent in the first quarter of 2013, its slowest pace in more than three years, missing expectations as weak exports weighed on the trade-dependent nation.

The economy had expanded a surprisingly strong revised 6.5 percent year-on-year in the fourth quarter last year, powering full-year growth in 2012 to 5.6 percent.

A Reuters poll had forecast Malaysia's economic growth to have eased to 5.2 percent in the first quarter from a year ago, the slowest pace of expansion in a year, as exports sagged in the face of weaker demand for electronics and palm oil.

"The Malaysian economy was affected by the weakness in external demand," Central Bank Governor Zeti Akhtar Aziz said in a news conference on Wednesday, adding that strong domestic demand would continue to drive growth.

The central bank said that resilient domestic demand is expected to be the "key driver of growth," underpinned by sustained private sector expansion and supported by the public sector. The central bank expects the economy to grow between 5-6 percent this year.

Exports, which make up about 60 percent of the economy, slipped 2.4 percent in the first quarter from a year ago, reflecting the uneven pace of growth in major trading partners China and the United States.

Despite sluggish trade, economists expect a pick-up in investment activity with the May 5 national election out of the way. Strong investment spending across CONSTRUCTION [], manufacturing and mining is expected to help Malaysia's economy regain momentum as the ruling coalition presses on with a $444 billion economic transformation programme after winning the election this month.