Published: 2010/07/15
Malaysia’s economic rebound is set to slow in the second half of this year after its central bank raised interest rates for a third time, the Malaysian Institute of Economic Research predicts.
“Economic growth is expected to taper off in the second half of 2010 due to further policy tightening measures and disappearing low-base effects,” the institute said in a report released in Kuala Lumpur today.
Southeast Asia’s third-largest economy may expand 6.5 per cent this year and 5.2 per cent in 2011, the partially government-funded research group said. The institute raised its 2010 forecast from 5.2 per cent after gross domestic product jumped 10.1 per cent from a year earlier in the first quarter following last year’s recession.
The country’s central bank raised its benchmark overnight policy rate to 2.75 per cent on July 8, judging the monetary stance to be supportive of the economy, even as threats to the global recovery have appeared. Malaysia’s rebound may slow in the second half of the year because of “external factors,” Prime Minister Datuk Seri Najib Tun Razak said last week.
Exports by companies such as Sime Darby Bhd and Unisem (M) Bhd rose at the slowest pace in three months in May as sales to Europe and China eased.
Malaysia’s inflation rate is forecast at 2.2 per cent in 2010, the research institute said today. MIER expects the overnight policy rate to settle at 2.75 per cent by end-2010 and increase to 3.25 per cent in 2011, driven by firmer economic expansion.
Consumer prices climbed 1.6 per cent in May from a year earlier, the fastest pace in a year, as food and transport costs rose with the strengthening economy. -- Bloomberg
http://www.btimes.com.my/Current_News/BTIMES/articles/20100715103206/Article/
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