Malaysia's economy grew 6% in 2014, says Bank Negara

by **Cals** Thu 12 Feb 2015, 19:06

Malaysia's economy grew 6% in 2014, says Bank Negara

By Cynthia Blemin / theedgemarkets.com | February 12, 2015 : 2:13 PM MYT

KUALA LUMPUR (Feb 12): Malaysia's economy grew at a 5.8% clip in the fourth quarter of 2014 (4Q14) from the 5.6% pace of expansion in the third quarter, underpinned by stronger private sector spending.

On the supply side, economic growth was stimulated by the services, manufacturing, mining and quarrying sectors.

[size=14]Bank Negara Malaysia (BNM) announced today that Malaysia's gross domestic product (GDP) grew at an annual 6% pace last year, up from 4.7% in 2013, with a value-added of RM835 billion at constant prices and RM1,070 billion at current prices.

Overall, the ringgit depreciated by 6.4% against the US dollar during Q414.

The 6% pace of expansion was above economists' expectations as well as the World Bank which had expected a 5.7% GDP growth for Malaysia in 2014.

The central bank had also earlier projected Malaysia’s economy to expand between 4.5% and 5.5% in 2014.

"Going forward, the Malaysian economy is expected to remain resilient to withstand the more challenging conditions in the external environment," said BNM Governor Tan Sri Dr Zeti Akhtar Aziz told a news conference to announce the Q4 2014 GDP results today.

"The economy remains resilient as the result of the country's diversified economic structure, supported by strong fundamentals such as low inflation, favourable employment conditions, low external debt and ample international reserves, a strong and well-capitalised banking system, and deep and well-developed financial markets," she added.

Nevertheless, Zeti said the external environment would continue to remain highly uncertain as a result of the divergence in policies across key economies, volatility in crude oil prices and the volatile capital flows and international financial markets.

While private spending consumption is expected to moderate, she is confident that the steady rise in income and employment, and the increased disposal income from lower oil prices will support household spending.

Zeti also said the decline in energy prices was expected to provide some additional support to overall global growth, as higher disposable income and lower inflation would support consumer spending.

Meanwhile, international reserves of BNM amounted to RM405.5 billion (equivalent to US$116 billion) as at Dec 31, 2014, said Zeti.

Private investments also advanced by 11.2%, while larger inflows of foreign direct investments reflected sustained foreign investors interest in Malaysia, she added.
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