KUALA LUMPUR, July 17 (Bernama) -- Domestic demand, which has remained
resilient, is expected to be a major source of support for the Malaysian economy
this year, especially with uncertain prospects clouding the global economy.
Malaysian Rating Corp Bhd (MARC), in its "The Malaysian Economy Sectoral
Overview: The Perspective from 20,000 Feet", said real private consumption
expanded at a robust 7.4 per cent in the first quarter of this year.
The real private consumption will remain relatively strong with an estimated
growth of 6.2 per cent this year, supported by a stable labour market with
unemployment rate around three per cent, the rating agency said.
MARC said the relatively easy credit will ensure that consumer spending will
remain strong despite some weaknesses in loan growth following stricter lending
guidelines imposed by Bank Negara Malaysia starting this January.
"Notwithstanding this, we view the guidelines as a major step in containing
ballooning household debt which may endanger the overall macro economy if not
properly addressed," it said.
The rating agency said the country''s growth momentum was expected to
moderate this year in the wake of languishing external demand.
It said exports were expected to continue its downtrend as a result of the
European economic crisis which has sapped demand for goods from major Asian
economies including China and India.
"We expect real exports to grow by an average of 1.2 per cent this year.
However, prospects for the electronics and electricals (E&E) sector have
improved of late, indicating better demand for global semiconductors going
forward," it said.
MARC said these positive developments will prevent further deterioration in
Malaysia''s E&E exports in the next six months.
On other note, it said, the momentum in private investments were
encouraging.
"Judging by the current sentiment, private investments are expected to
register another respectable growth year in 2012, underpinned by efforts
implemented through Economic Transformation Programme," it said.
According to MARC, the upswing in private investment could be seen in the
first quarter of this year where total investments grew at a robust 16.2 per
cent pace compared with 8.4 per cent growth in the fourth quater last year,
largely driven by strong private investments.
Last year, RM94 billion in private investments were recorded, exceeding the
Performance Management & Delivery Unit''s target of RM83 billion. -- BERNAMA
NBB THS