Malaysia is expected to register a 7.4-percent growth in gross domestic product (GDP) for 2010 following an official announcement on a stronger-than- expected GDP growth of 8.9 percent in the second quarter of the year, a research firm said on Wednesday.
A research paper published by RAM Holdings on Wednesday predicted that Malaysia's GDP is expected to grow at a slower pace of 5.6 percent in the second half of the year on account of moderating external demand, fading low-base effects and easing restocking activities.
It said that domestic demand is expected to maintain its upbeat momentum in the second half of 2010 on improving consumer sentiment on stable unemployment trends and increased consumption of durable goods. Therefore, the domestic consumption by private sector and public sector for the whole year is estimated to rise 7. 7 percent and 6.4 percent year on year respectively.
For external demand, the research body forecast that robust export growth driven by sustained demand from newly industrialized economies and China in the first half of 2010 might continue in the second half as Asian economies still powered much of the current global growth momentum. For the full year, exports are projected to expand 12.9 percent year on year, with imports clocking up 18.3 percent, backed by a pick-up in industrial and investment activities.
It predicted that investment activities are expected to expand by 9.9 percent for 2010 in a supportive backdrop of accommodative interest rates, increasing liquidity in the banking system and easy credit conditions.
Considering food and transport costs may continue an upward trend as it did in the first half of 2010 after the government decided to slash part of its subsidies, the research body maintains its estimated inflation rate of 2.5 percent for the whole year. The inflation rate rose 1.9 percent year on year in July./.