Macroeconomic Forecast Malaysia

Malaysia's economy expanded by 5.3% y-o-y in Q310, slowing considerably from the 8.9% figure recorded in Q210. Notable, private consumption and investment growth came in relatively firm, compensating for the drag caused by imports in the external sector. We expect the positive growth trend to enable the country to register full-year growth of 6.4% for 2010. That said, we believe the pace of economic expansion will moderate in 2011 and 2012, coming in at 4.0% and 4.3% respectively, with the potential slowdown in Chinese growth remaining the largest risk factor.

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