KUALA LUMPUR, Aug 15 — Malaysia’s economic growth unexpectedly accelerated to the fastest pace in six quarters on surging exports and domestic demand, adding scope for the central bank to increase interest rates further.

Gross domestic product rose 6.4 per cent in the three months through June from a year earlier, after climbing 6.2 per cent in the first quarter, the central bank said in a statement in Kuala Lumpur today. The median in a Bloomberg News survey of 25 economists was for a 5.8 per cent increase.

Malaysia was the first in Southeast Asia to raise its benchmark rate in 2014 as investment, private consumption and overseas orders for the nation’s goods sustained growth. Inflation was the highest since 2011 earlier this year after Prime Minister Najib Razak cut subsidies on fuel and sugar to contain fiscal spending.

“Given robust growth dynamics, lingering inflation pressures and a preemptive move to guard against the build-up of financial imbalances, we think Bank Negara may pursue another” rate increase in September, Julia Goh, an economist at CIMB Group Holdings Bhd., said before the announcement.

The ringgit rose 0.3 per cent against the US dollar as of 11:55am local time. It has strengthened about 3.3 per cent this year, the second-best performer among 11 major Asian currencies tracked by Bloomberg. The FTSE Bursa Malaysia KLCI Index of shares was little changed today.

GDP expansion this year will probably exceed the central bank’s forecast range of 4.5 per cent to 5.5 percent, Governor Zeti Akhtar Aziz said today. The government will announce a new growth forecast during its budget, she said. The economy grew 4.7 per cent last year.

Business-friendly

The government is spurring investment by making it simpler for companies to operate in the country, with Malaysia moving up six ranks in the World Bank’s latest index of ease of doing business. Najib wants to increase the share of tourism, health care and other services to 65 per cent of GDP by 2020 from 55.2 per cent in 2013.

“Leading indicators suggest that private sector activity will remain as the key driver of growth,” the central bank said in a statement today. “Exports will continue to benefit from the recovery in the advanced economies and from regional demand. Going forward, the Malaysian economy is expected to remain on a steady growth path.” — Bloomberg