Kuala Lumpur. Malaysia’s economy grew at an annual pace of 4.7 percent in the first quarter of 2012, slowing from the previous three months as a struggling export sector weighed on the economy despite firm domestic demand, the central bank said on Wednesday.
The first-quarter growth, which beat economists’ expectations of a 4.5 percent expansion, comes as Malaysia’s net exports slumped 20.8 percent from a year ago.
“For the Malaysian economy, domestic demand is expected to remain resilient, supported by continued expansion in private sector economic activity and public sector expenditure,” the central bank governor Zeti Akhtar Aziz said in a news conference.
Private consumption rose 7.4 percent from a year ago, while public spending increased 5.9 percent. Malaysia’s economy grew 5.2 percent year-on-year in the last three months of 2011, beating economists’ expectations, but has been slowing since the third quarter of last year as the country feels the effects of weaker global activity.
In its monetary policy meeting on May 11, the central bank kept the overnight policy rate on hold for the sixth straight time, saying domestic demand has propped up growth even though the euro zone debt crisis continues to fester.
Inflation in April, released earlier on Wednesday, was 1.9 percent, below a Reuters poll forecast of a 2.1 percent year-on-year rise.
Malaysia’s export growth in the first quarter fell to 4.4 percent from 9.9 percent in the fourth quarter. Shipments in March slumped, with exports contracting 0.1 percent.
In 2011, Malaysia’s economy grew by 5.1 percent after a 7.2 percent expansion in 2010. Bank Negara has projected GDP to expand 4-5 percent this year, slowing from 5.1 percent in 2011. A Reuters quarterly poll last month estimates 2012 GDP at 4.1 percent.
Within the region, Thailand’s economy, affected by severe flooding last October, grew 0.3 percent from a year ago while Indonesia reported a 6.9 percent year-on-year rise — its slowest growth in six quarters — as exports fell.
Singapore’s first-quarter GDP grew 1.6 percent year-on-year, easing from 3.6 percent in the last three months of 2011.
China, Malaysia’s largest trading partner, reported its slowest growth in nearly three years with a weaker-than-expected annual 1Q GDP growth of 8.1 percent.