Highlight BNM lowers 2013 GDP growth forecast; 2Q GDP grows 4.3%

by **Cals** Wed 21 Aug 2013, 19:08

Highlight BNM lowers 2013 GDP growth forecast; 2Q GDP grows 4.3%
Business & Markets 2013
Written by Shalini Kumar of theedgemalaysia.com
Wednesday, 21 August 2013 18:06

KUALA LUMPUR (Aug 21): Malaysia's gross domestic product (GDP) expanded by 4.3% for the second quarter, driven by continued strong domestic demand but the overall growth has been affected by the weak external sector.

On a quarter-on-quarter seasonally adjusted basis, the economy recorded a growth of 1.4% (1Q 2013: -0.4%).

Domestic demand for the second quarter grew by 7.3%, compared with 8.2% in the first quarter.

"Malaysia's exports contracted further due to the weak global demand for electrical and electronic products and the lower prices of major commodities. This accounts for the main reason which affected our overall growth performance," said Bank Negara Malaysia (BNM) governor Tan Sri Dr Zeti Akhtar Azis when releasing second quarter economic data today.

"In addition, the increase in consumption imports was led by the demand for processed food and beverages and durable consumer goods,” she added.

Due to the moderate growth performance in the first half of the year, BNM revised down Malaysia’s GDP growth outlook for 2013 to 4.5%-5%, from previous growth forecast of 5%- 6%, said a separate statement from Bank Negara.

In the external sector, the current account surplus amounted to RM2.6 billion in the second quarter, due to a lower goods surplus, as well as sustained services deficit and outflows in the income accounts, said the central bank.

In the first quarter, the surplus was RM8.7 billion.

The overall balance of payments registered a surplus of RM1.5 billion (1Q 2013: RM4 billion).

Zeti said the Overnight Policy Rate (OPR) will be maintained at 3.00%. At this level of the OPR, monetary conditions remain supportive of economic activity.

On the ringgit which is hit by outflow of foreign funds from the fixed income and equities markets, Zeti said the government “has ability to handle its weakness”.

Between 1 July and 20 August 2013, the ringgit further depreciated against the US dollar by 3.7%, after sliding against the greenback previously.

The ringgit also depreciated against the pound sterling (-6.0%), euro (-5.7%) and Japanese yen (-4.9%).

GDP by Expenditure Components (at constant 2005 prices)
	2012		2013
	2Q	1H	1Q	2Q	1H
	Annual change (%)
Aggregate Domestic Demand (excluding stocks) Consumption Private sector Public sector Gross Fixed Capital Formation Private sector Public sector Net Exports Exports of Goods and Services Imports of Goods and Services	14.0 9.1 8.6 11.0 26.2 25.6 27.2 -40.4 1.6 8.3	11.8 8.4 8.0 10.1 20.7 22.4 17.9 -33.1 1.9 7.7	8.2 6.1 7.5 0.1 13.1 10.9 17.3 -36.4 -0.6 3.6	7.3 8.0 7.2 11.1 6.0 12.7 -6.4 -41.6 -5.2 -2.0	7.7 7.1 7.4 5.8 9.3 11.8 4.7 -38.7 -2.9 0.8
GDP	5.6	5.4	4.1	4.3	4.2
GDP (q-o-q growth, seasonally adjusted)	1.3	-	-0.4	1.4	-
Source: Department of Statistics, Malaysia

GDP by Economic Activity (at constant 2005 prices)
	Share 2012 (%)	2012		2013
		2Q	1H	1Q	2Q	1H
		Annual change (%)
Agriculture Mining Manufacturing CONSTRUCTION [] Services	7.3 8.4 24.9 3.5 54.6	-4.6 2.2 5.7 21.5 6.6	-1.3 1.2 5.1 18.5 6.2	6.0 -1.9 0.3 14.2 5.9	0.4 4.1 3.3 9.9 4.8	3.1 1.0 1.9 12.0 5.4
Real GDP	100.0¹	5.6	5.4	4.1	4.3	4.2
Real GDP (q-o-q seasonally adjusted)	-	1.3	-	-0.4	1.4	-
¹ Numbers do not add up due to rounding and exclusion Source: Department of Statistics, Malaysia