MARC Maintains Malaysia's GDP Forecast for 2012 at 4.4 Per Cent

KUALA LUMPUR, July 4(Bernama) -- Malaysian Rating Corporation Bhd has maintained Malaysia's gross domestic product (GDP) growth forecast for this year at 4.4 per cent and 5.0 per cent in 2013. The rating agency also said it does not foresee Malaysia Central Bank undertaking an interest rate cut in the near term due to a respectable growth performance in the first quarter. MARC said it is also due to an estimated small positive output gap expected for the year and at the same time, an overly accommodative monetary stance and an accommodative monetary policy, that is inconsistent with the central bank's efforts to contain expansion in already overstretched household balance sheets in the economy. It also cited the relatively high level of capacity utilisation rate in the manufacturing sector as another reason. MARC is of the view that headline inflation will likely be around 1.5 per cent in the second half of this year, pulling the whole year's average down to 1.8 per cent from 3.2 per cent in 2011. The research house said that the federal government's budget deficit which stood at a revised 4.8 per cent of GDP in 2011, is anticipated to improve further this year, if no other major unplanned spending in the next one year is undertaken. -- BERNAMA