May 19, 2014 10:49 am JST

Malaysia' s economy grew 6.2% in Jan.-March

CK Tan, Nikkei staff writer

KUALA LUMPUR -- Malaysia's economy surged 6.2% in the first quarter of 2014, the fastest pace since the fourth quarter of 2012. The growth was aided by higher domestic demand and a turnaround in net export numbers.

     Domestic consumption remains the driver for demand with government spending increased 11.2% on public projects during the January-March quarter. Exports grew 7.9%, largely contributed by demand for electronics and petroleum products.

     Major economic sectors also recorded improved numbers, with manufacturing posting 6.8% and services 6.6%, compared to 5.2% and 6.4% in the September-December period of 2013 respectively.

     On a quarter-on-quarter seasonally-adjusted basis, the gross domestic product grew by 0.8%.

     While growth for subsequent sectors is expected to be in the range of 5.0-5.5%, the bank reiterated that it may need to adjust interest rate soon to address economic imbalances.

     "We will monitor closely the liquidity and low cost of borrowing that will lead to financial imbalances," Central Bank Gov. Zeti Aziz said at a press conference on Friday.

     Malaysia has maintained its policy rate at 3% since May 2011. But earlier this month, the central bank said that "monetary accommodation" may need adjustment amid concerns over high household debt.