KUALA LUMPUR: The Malaysian economy is expected to expand by 5.3 per cent this year, taking into consideration domestic forces that may offset weaknesses in the external sector.
Malaysian Rating Corp Bhd (MARC) said the country’s gross domestic product (GDP) growth performance would once again hinged on the global economic momentum, which at this juncture was clouded by the prospects of the recovery in the eurozone.
It said, notwithstanding this, the relatively resilient consumer sentiment suggested that GDP growth in 2013 would likely hover around Malaysia’s long-term growth trend of five per cent.
“Assuming the upbeat sentiment is sustained and the labour market remains relatively stable, we anticipate private consumption to be able to chalk up another impressive growth of 6.2 per cent in 2013, slightly slower than this year’s estimated growth of 7.5 per cent,” MARC said in its “Economic Outlook 2013: Sustaining Domestic Pillars Amidst Global Uncertainties” report here yesterday.
MARC said Malaysia’s domestic demand would likely stay resilient amid rising contributions from private investment and private consumption.
“Judging by the recent trend, the momentum in private investment is the key to the possible upside of Malaysia’s GDP performance in 2013, although consumers play a leading role in supporting the economy.
“We foresee that the country’s private investment will continue to remain robust in view of the mega projects that will be undertaken by the government in the next few years, including among others, the mass rapid transit project, Menara Warisan, the RAPID project and the Second Penang Bridge,” MARC said.
The rating agency said the bottoming of Malaysia’s exports would likely lead to a mild rebound in external trade performance as exports to Asian economies stabilised.
MARC said the country’s real exports this year were expected to record four per cent growth, with semiconductor sales to rebound by only 4.5 per cent and palm oil prices to move within RM2,200-RM2,600 per tonne.
On government financial and debt position, MARC said, unless the growth momentum dissipated significantly in 2013, the federal government’s fiscal position was expected to improve in 2013 and that the deficit target of four per cent of GDP would not be difficult to achieve.
“This is based on the expectation of a stronger revenue growth that the economy is likely to see. We think that the 0.7 per cent growth forecast for revenue this year is a gross underestimation,” it said.
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