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162142
Fri, 02/18/2011 - 15:31
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Malaysia to continue robust growth momentum, say economists
KUALA LUMPUR, Feb 18 (Bernama) -- The Malaysian economy, which expanded by 7.2 per cent in 2010, is expected to continue its robust growth momentum into 2011, supported by healthy domestic demand, economists said.
Although a slower pace was expected in the first half, they predicted that a better performance would only be reflected in the second half, boosted by implementation of Economic Transformation Programme (ETP) projects.
Affin Investment Bank economist, Alan Tan, said the fourth quarter (4Q) gross domestic product (GDP) of 4.8 per cent, which was better than market expectation, indicated that the growth momentum continued into the last quarter of the year.
"The 4Q GDP is better than market expectation of four-4.5 per cent. The question is whether we can continue to see growth going into the first half of 2011 as compared to a very high-based growth of the first half of 2010," he told Bernama here today.
Tan said the first and second quarter of 2010 saw GDP growth at 10.1 per cent and 8.9 per cent, respectively.
"We will see a slower growth in the first half partly due to base effect," he said, adding that the growth would likely be around 3.5-four per cent for the period.
Echoing similar views, MIDF Investment Bank economist, Anthony Dass, who anticipated a GDP growth of 5.3 per cent this year, said the slower growth could be attributed to less favourable base effects, unwinding of policy stimulus and more subdued growth in several major markets.
However, he highlighted that the drivers of economic growth this year would be private expenditure, such as private consumption and investment, which would continue to benefit from the strengthening of the labour market and the reduction of the output gap.
"The 4Q result of 4.8 per cent did not spring any major surprises. It turned out to be slightly higher than our estimates of 4.6 per cent and consensus of 4.4 per cent.
"Hence, the real GDP last year fell in line with our expectation of 7.2 per cent," he said.
Meanwhile, Grant Thornton managing director and managing partner, Datuk Narendra Kumar, said higher commodity prices during the 4Q contributed to a better number.
Strong performance by commodities like palm oil, rubber as well as
petroleum, which are among the biggest revenue earner for the country, has strengthened the country's position, he said.
RAM Holdings Bhd Group chief economist, Dr Yeah Kim Leng, said the country's performance was an encouraging sign and has put it on a strong foundation for improvement.
"The economy is expected to remain moderate this year, supported by export. Nevertheless, the stronger-than-expected performance in the advanced economy has allayed earlier concern about the possibility of a double-dip recession this year," he said.
He said eventhough the US economy remained weak, it was improving and would eventually boost the country's export performance.
Yeah said the first quarter of this year was forecast to normalise at five-six per cent.
For the second half of this year, all economists are in consensus that the domestic economy would accelerate, boosted by the implementation of ETP projects, healthy consumer spending as well as improved external environment globally.
Affin Investment is maintaining its 2011 GDP forecast at five per cent while RAM Holdings is revising upwards its forecast to 5.6 per cent from 5.4 per cent forecast last year.
Although a slower pace was expected in the first half, they predicted that a better performance would only be reflected in the second half, boosted by implementation of Economic Transformation Programme (ETP) projects.
Affin Investment Bank economist, Alan Tan, said the fourth quarter (4Q) gross domestic product (GDP) of 4.8 per cent, which was better than market expectation, indicated that the growth momentum continued into the last quarter of the year.
"The 4Q GDP is better than market expectation of four-4.5 per cent. The question is whether we can continue to see growth going into the first half of 2011 as compared to a very high-based growth of the first half of 2010," he told Bernama here today.
Tan said the first and second quarter of 2010 saw GDP growth at 10.1 per cent and 8.9 per cent, respectively.
"We will see a slower growth in the first half partly due to base effect," he said, adding that the growth would likely be around 3.5-four per cent for the period.
Echoing similar views, MIDF Investment Bank economist, Anthony Dass, who anticipated a GDP growth of 5.3 per cent this year, said the slower growth could be attributed to less favourable base effects, unwinding of policy stimulus and more subdued growth in several major markets.
However, he highlighted that the drivers of economic growth this year would be private expenditure, such as private consumption and investment, which would continue to benefit from the strengthening of the labour market and the reduction of the output gap.
"The 4Q result of 4.8 per cent did not spring any major surprises. It turned out to be slightly higher than our estimates of 4.6 per cent and consensus of 4.4 per cent.
"Hence, the real GDP last year fell in line with our expectation of 7.2 per cent," he said.
Meanwhile, Grant Thornton managing director and managing partner, Datuk Narendra Kumar, said higher commodity prices during the 4Q contributed to a better number.
Strong performance by commodities like palm oil, rubber as well as
petroleum, which are among the biggest revenue earner for the country, has strengthened the country's position, he said.
RAM Holdings Bhd Group chief economist, Dr Yeah Kim Leng, said the country's performance was an encouraging sign and has put it on a strong foundation for improvement.
"The economy is expected to remain moderate this year, supported by export. Nevertheless, the stronger-than-expected performance in the advanced economy has allayed earlier concern about the possibility of a double-dip recession this year," he said.
He said eventhough the US economy remained weak, it was improving and would eventually boost the country's export performance.
Yeah said the first quarter of this year was forecast to normalise at five-six per cent.
For the second half of this year, all economists are in consensus that the domestic economy would accelerate, boosted by the implementation of ETP projects, healthy consumer spending as well as improved external environment globally.
Affin Investment is maintaining its 2011 GDP forecast at five per cent while RAM Holdings is revising upwards its forecast to 5.6 per cent from 5.4 per cent forecast last year.
