ADB Projects 4 Pct GDP Growth For Malaysia This Year

KUALA LUMPUR, April 12 (Bernama) -- The Asian Development Bank (ADB) is projecting a moderate four per cent growth in gross domestic product (GDP) for Malaysia this year, citing the uncertainty in the global economy as a factor. However it expects the GDP growth to be better at five per cent in 2013, citing the anticipated improvements in the external environment. In 2011, Malaysia's GDP grew 5.1 per cent, mainly fueled by private and government consumption on the demand side and by an expansion of the services sector on the production side, it said. The Malaysian government meanwhile on January 12 this year, announced that it was expecting a five to six per cent GDP growth this year. ADB said slower global trade and growth will weigh on exports and manufacturing and for the current year, domestic demand will again anchor growth. The Manila-based ADB said this in its report, "Asian Development Outlook 2012:Economic Trends and Prospects In Developing Asia:Southeast Asia", released Thursday. "Private consumption will get support from government decisions in the 2012 budget to raise wages for the public sector and to make a one-time cash payment to low- and middle-income groups (53 per cent of all households)." It said the government's plans to introduce a minimum wage in 2012 would also lift incomes for the lowly paid. "Still, the labour market is likely to soften in 2012, particularly in trade-exposed industries." Private investment in export-oriented industries such as electrical and electronics products will be subdued by the weak global outlook this year, although investment will likely be relatively buoyant in industries that depend on domestic demand. The ADB also expects inflation to decline to 2.4 per cent amid moderating domestic demand and generally lower prices for imported commodities. "This forecast assumes that subsidies on electricity, food, and fuel will not be cut ahead of national elections due in 2013," it said, adding that the stronger ringgit against the US dollar in the first quarter, helped to damp inflation Malaysia's inflation in 2013 is projected to pick up to 2.8 per cent, in line with domestic demand. ADB also said that the lower than expected growth in global trade would put the 2012 growth forecast at risk, given the country's reliance on exports. Domestically, the high level of household debt poses a risk if the labour market is weaker than anticipated, it cautioned. --BERNAMA