Malaysian economy grows 5.8%

AFP News

Malaysia's economy grew 5.8 percent in the third quarter, its quickest pace in a year, due to strong demand fuelled by robust domestic spending, the central bank said Friday. "Despite the challenging environment, the Malaysian economy registered a higher growth (rate)," Bank Negara governor Zeti Akhtar Aziz said in a statement. The economy expanded a revised 4.3 percent in the previous quarter.

The central bank described domestic demand as "robust", driven by an expansion in both household and business spending as well as higher public sector expenditure. Zeti said that domestic demand would continue to power growth. Malaysia expects the economy to expand five percent this year although analysts have forecast more a modest rate of 4.68 percent in 2011 and 4.5 percent in 2012. Yeah Kim Leng, chief economist with RAM Holdings, said the economy would remain resilient for the rest of the year backed by strong consumer demand.

"Given the stronger-than-expected third quarter, it is more likely that the overall gross domestic product... will be above 5.0 percent. "The 5.0 percent growth envisioned by the government is on track for the year due to increases in domestic spending and a boost in investment activities," he told AFP. Inflation in the third quarter rose slightly to 3.4 percent compared with 3.3 percent in the previous period due mainly to higher food prices.