Malaysia's 1Q GDP growth not less than 4.5%

KUALA LUMPUR: Malaysia's economic growth in the first quarter of 2011
is expected to be no less than 4.5 per cent, Minister in the Prime
Minister's Department Tan Sri Nor Mohamed Yakcop said Thursday, April
28.

"Based on the data compiled in the first two months, the
growth is seen not to be less than 4.5 per cent," he told reporters at
the launch of the World Bank's Malaysia Economic Monitor-Brain Drain
report here.

He said the first quarter results would be released in May.

He said the country's growth was expected to pick up in the second half
of 2011 with Gross Domestic Product seen expanding between five and
six per cent for the whole year.

Meanwhile, the World Bank's
senior economist for Malaysia, Philip Schellekens, said the country was
expected to develop favourably at 5.3 per cent in 2011 and 5.5 per
cent in 2012 after staging a strong recovery last year.

As in
the past years, domestic demand, especially private consumption and
fixed investment, was expected to continue driving the economy, he
added.

According to the report, private investment is set to
strengthen but remains highly sensitive to progress with the
implementation of Economic Transformation Programme (ETP) projects.

Consumer price inflation, meanwhile, is expected to gain strength
before moderating. Inflation is expected at three per cent in 2011 and
2.5 per cent in 2012 as a result of higher global food and energy
prices.

The report also shows that further monetary policy
normalisation is likely in 2011 after Bank Negara Malaysia signalled in
its March statement that demand-pull inflation is building up.

Further Overnight Policy Rate (OPR) rises are expected in the coming
months but how soon the rate will return to the pre-crisis level remains
data-dependent, according to the report.

Additional Statutory
Reserve Requirement adjustment is also expected, especially if OPR
normalisation leads to excessive capital inflows and liquidity in the
financial markets. - Bernama