KUALA LUMPUR, Feb 12 — RHB Research expects domestic demand to sustain Malaysia’s growth at around 5.3 per cent in 2015, albeit slower than six per cent last year, with the domestic demand envisaged to grow at a more moderate pace in this year.
Malaysia’s real GDP growth picked up pace to 5.8 per cent year-on-year in fourth quarter (4Q) 2014, after moderating to 5.6 per cent in third quarter.
In a note today, it said the growth was higher than its expectation of a 5.3 per cent in 4Q, due to stronger growth in domestic demand.
“It remained the anchor of growth in 4Q, mainly on account of stronger-than-expected growth in private investment and private consumption,” said the research house.
On the supply side, the stronger growth was due to improvement in the services and mining sectors, it said.
An economist, who declined to be named, said the economy would grow slower this year due to softening export, dampened by the global demand and prices of commodity.
“However, what really is helping out in our export is the electrical and the electronic side.
“While the weaker ringgit in the short term may actually help in terms of competitiveness, if the local currency continues to remain weak, overall that would also affect the economy, because the import cost and all other cost would go up,” he told Bernama.
He said lower oil prices will impact oil and gas investment and government spending and the implementation of Goods and Services Tax would likely constrain the growth of domestic demand, leading to a more moderate increase in consumer spending and private investment.
“For this year we are looking at an economic growth of about 4.7 per cent to five per cent with an inflation of about 3.6 per cent to 3.8 per cent,” he said. — Bernama
