Malaysia’s economy grows 6.2% in first quarter

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Malaysia’s economy grew by a surprising 6.2 per cent in the first quarter of the year, the central bank announced Wednesday, but economists warned that its surging exports could be hit by a slowdown in China.

Southeast Asia’s third largest economy saw positive growth in the quarter in all its major economic sectors except for mining, and strong expansion in domestic demand for foreign goods, Bank Negara said.

Inflation rose to 3.4 per cent in the first quarter against 3.0 per cent in the same period last year, Bank Negara said, after cuts in fuel, sugar and other subsidies.

Trade grew healthily between January and March, with strong exports pushing the trade surplus up by 14.9 per cent and domestic demand rising 7.4 per cent year-on-year.

“Exports will continue to benefit from the recovery in the advanced economies while private domestic demand is expected to remain the key driver of the overall growth,” the bank said.

But economists warned that a continuing global recovery hung in the balance as China’s growth continues to cool.

“Going forward, despite continued improvement in the US and Europe, we are still reliant on the performance of China and looking at reforms in Japan,” said Kenanga Investment’s Wan Suhaimie Wan Mohd Saidie.

China has become Malaysia’s top export market in recent years, particularly for palm oil, transport equipment and electronics components.

Exports to China were worth 97 billion ringgit ($30 billion) in 2013, although outgoing trade to the Asian giant slid in March for the first time since June 2013.

The government has forecast economic growth of between 5 and 5.5 per cent this year, while the central bank has a wider range of 4.5 to 5.5 per cent.

The government is also planning to introduce a goods and services tax next year as it seeks to tackle its budget deficit.

A May 1 rally saw thousands of Malaysians take to the streets to protest against the new tax, saying the cost of living is already too high.

Malaysia has one of Asia’s highest debt-to-GDP ratios. Critics say the government is mismanaging the economy and has failed in its pledge to fight endemic corruption.

 

 

 

 

 

 

Source : Channel News Asia | May 16, 2014

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Thomas D’Innocenzi is a highly accomplished, results-focused international consultant with extensive experience in global sourcing and business development worldwide to meet evolving business needs. Tom has proven ability in implementing and managing profitable global marketing and sourcing operations. He has extensive experience in international business development to accommodate rapid growth. Skilled in building top-performing teams, bench-marking performance, and developing organizations to improve efficiency, productivity, and profitability. Experienced transition leader and change agent. Tom founded Nova Advisors with the mission of providing expert Global Business Development consulting services for companies seeking to expand their market share as an independent consultant. Tom has a network of experts and advisors throughout the Asia-Pacific region and North America. His expertise includes business development, global sourcing, manufacturing, commodities, logistics, QA/QC, FDA, regulatory compliance, sustainability, and supply chain optimization. Tom is experienced in the medical device, apparel, consumer goods and technology services verticals helping companies advance their global sourcing capabilities and develop new markets through a local and sustained approach. Located in SE Asia and the United States, Tom expands market reach to drive sales. His global sourcing strategy includes directly negotiating with commodity suppliers, supply chain networks and distributors for optimal terms based on his expertise and first-hand knowledge of the players. Contact Tom to use his consulting service to increase your global market and make global sourcing profitable for you in the Asia Pacific Region and the United States. http://www.NovaAdvisors.com thomas@NovaAdvisors.com USA Direct: +1.904.479.3600 SINGAPORE: +65.6818.6396 THAILAND: +662.207.9269
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