Exports to remain a dynamo for GDP

  • Business
  • Thursday, 26 Feb 2004

THE strong economic growth numbers released by Bank Negara yesterday have clearly beaten market consensus. Economists and fund managers interviewed by StarBiz see the growth momentum continuing at a faster pace this year. They also see exports and private consumption as the key factors fuelling this growth. Below are their comments.  

GEOFFREY NG Senior investment officer Pacific Mutual Fund  

THE numbers are good! They have exceeded our expectations. 

We still hold on to our forecast of 5.8% to 6% for this year.  

The growth will be fuelled by exports and the multiplier effect from the ample liquidity that will boost domestic demand, particularly consumer spending. 

We also expect higher loan growth as a result of the increase in consumer spending. But we do not anticipate significant growth in private investment for the moment. 

MANU BHASKARAN Head of Economic Research Centennial Group 

THE 4th quarter result is better than expected. Going by the strong leading indicator globally, we can expect Malaysia's economy to chart much higher growth this year. 

Le Heng Guie

LEE HENG GUIEHead of economicsCIMB Securities  

IT is a good set of numbers. Private sector demand helped boost the economy. This shows the effectiveness of the government policies in spurring private consumption. 

Consumer spending will continue to be the dominant factor to drive the economy.  

However, private investment is expected to pick up. There are already signs showing higher private investment in Q4. 

I anticipate growth of 5.8% this year. But there is potential upside risk for my forecast because the export growth could be stronger against the recovery of the global economy. 

Rajeev Malik

RAJEEV MALIK Senior regional economistJP Morgan  

THE numbers exceeded my expectations slightly but were much higher than the market consensus. My forecast was 5.1% for last year and 6.1% for the 4th quarter. 

I expect higher growth this year, pegging my forecast at 5.5%. The Malaysian economy will be driven by export and domestic demand. The ample liquidity will continue to spur consumer demand. Private investment is also expected to recover. 

SONG SEN WUN Regional EconomistGK Goh Securities  

THE GDP figures exceeded our earlier forecast of 6.1% and 5.1% for Q4 and full-year 2003 respectively.  

No surprise where the growth drivers came from.  

On the supply side, manufacturing expanded 12% year-on-year, the strongest since 2000. Mining grew 3% lifted by higher prices and production.  

Construction rose 2.7% year-on-year, the strongest annual pace in 2 years and the services sector expanded 4.5% year-on-year which matched Q1 2003 growth.Domestic demand and inventory growth contributed to headline growth while net exports became a drag due to the stronger pace of imports. 

AZRUL AZWAR EconomistMIDF Sisma Securities  

DRIVEN by robust global demand, the much stronger than expected 6.4% year-on-year growth rate in the 4th quarter 2003 has reinforced our confidence that the current growth trend can maintain its momentum. 

The stellar growth score in Q4 was the best showing in 3 years since the 6.7% year-on-year surge in the Q4 of 2000, putting Malaysia among the top performers in the Asia Pacific region excluding Japan.  

So far, only China, Taiwan, the Philippines, Indonesia and Singapore have released their Q4 and full year GDP report card. 

Related Stories: 

Malaysia’s GDP up by 5.2% in 2003

Domestic demand, private sector set to drive growth 

Earlier forecast 

Robust growth likely for Malaysia 

For the full report from Bank Negara click here


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