Malaysian economy robust in 2013, despite GDP dip
WATARU YOSHIDA, Nikkei staff writer
SINGAPORE -- While Malaysia's real gross domestic product growth fell to 4.7% in 2013 from 5.6% the year before, the country's economy stayed relatively sure-footed, thanks to the recovery of exports in the latter half of the year and robust domestic demand.
Still, the uptick in exports owed mainly to goods headed to such places as China and Southeast Asia, meaning Malaysia faces the risk of a slowdown should demand from emerging markets shrink.
According to the data, which the country's central bank released Wednesday, GDP for October-December grew 5.1% on the year, a slight improvement over the 5% seen in July-September.
The recovery in the nation's exports -- and for the manufacturing industry in particular -- was the most significant factor behind relatively steady economic growth. Amid flagging demand from Japan, the U.S. and Europe, exports had fallen on the year for four consecutive quarters through the April-June term, but finally returned to the growth path from the July-September quarter.
According to the Malaysian trade ministry, exports ticked up 2.4% last year, buoyed by growth in the second half. Even so, while exports to China, Thailand, Indonesia and other destinations increased, figures declined for those headed to such markets as the U.S. and Japan. As rising wages have made Malaysia less attractive for foreign manufacturers, it is unclear whether exports will continue to grow.
Robust domestic demand also played a role. Private and government consumption rose 7.6% and 6.3%, respectively. Seeking to improve the nation's fiscal health, the government is reducing subsidies aimed at curbing growth in fuel and other prices. Inflation is apparent, with consumer prices edging up 2.1% last year and 3.2% in December alone.
Prime Minister Najib Razak's government has announced plans to introduce a consumption tax in 2015. That, along with inflation, may cause consumers to cinch their purse strings.