Stanchart Says Malaysia's GDP Growth To Ease In 2012

KUALA LUMPUR, Jan 16 (Bernama) -- Malaysia’s GDP growth is expected to ease to 2.7 per cent in 2012 from an estimated 4.8 per cent last year, a Standard Chartered Bank official says. Tai Hui, the bank's Regional Head of Research for Southeast Asia, said: "The slowdown will be caused by external weakness -- the US fiscal policy is paralysed by politics, the EU is mired in a debt crisis and China is slowing due to the effects of monetary policy tightening in the last two years." The government's 2012 GDP growth forecast was 5-6 per cent with investments under the Economic Transformation Programme (ETP) likely to drive growth. Speaking at the Global Research Briefing 2012 organised by Standard Chartered Bank here Monday, Hui said the commodity sector would be a key determinant of growth in 2012. He said palm oil, rubber and liquefied natural gas (LNG) contributed 70 per cent to Malaysia’s eight per cent export growth in the first nine months of 2011. "We have a relatively benign view of commodity pries, expecting crude palm oil prices to average at RM3,450 per tonne in 2012, up from RM3,216 in 2011," he said. Hui said the first quarter of 2012 would be the low point in terms of growth and there would be a rebound in the economic activities thereafter. “Infrastructure projects which have been soft in the second half of 2011 should provide support and this will accelerate to the second half of 2012,” he said. Hui also expected Bank Negara Malaysia (BNM) to ease policy in 2012 by a total of 50 bps in 2012, starting with a 25 bps cut in March. He saw inflation to average to 2.6 per cent in 2012 from 3.3 per cent in 2011 and the local stock market to perform better this year than 2011. "Analysts are still very much in favour of emerging markets than developed markets. "If you look at capital flows, growth fundamentals and also the fact that Malaysia is very commodity exposed economy, I would imagine the upside is perhaps stronger than the downside," he added. Meanwhile, Standard Chartered Bank's Chief Economist and Group Head of Global Research Dr Gerard Lyons expected the global economy to grow at 2.2 per cent for 2012 from just over three per cent last year. He said growth for 2010 was 4.4 per cent. (US$1=RM3.14) -- BERNAMA