Malaysia’s growth seems to have surpassed 5% for the 7th straight quarter which marks the longest stretch since the depth of the global financial crisis 5 years back. There is a pickup in the overall investment as well, thereby adding to the momentum.
Malaysia is the 3rd largest economy of the Southeast Asia and the Gross Domestic Product of the same is expected to rise by 5.5% in the first quarter of 2013, if compared with that of 2012. There is possibly a slide in the exports and hence, the pace has slowed down from its earlier value that of 6.4% in the last 3 months of 2012. The Malaysian Government is going to release the official figures soon.
On May, Najib Razak, the Prime Minister of Malaysia won the elections and he is poised to unleash the delayed investment projects. Economists from several banks such as Credit Suisse Group and Australia & New Zealand Banking Group Ltd. predicted that the investment should accelerate in the coming quarters. According to the Economist of United Overseas Bank Ltd., Ho Woei Chen, most of the investors are currently expecting that as Barisan Nasional stays in power, there is little uncertainty when it comes to the politics of this Asian country. Chen added that the investments are expected to be strong and this will almost certainly drive growth.
Najib was able to hold on to power after the smallest share of popular vote for his Governing coalition since 1969 as he held handouts to poor, gave higher wages to the civil servants and also energy subsidies. This mandate has given him the chance to promote the private sector led projects from oil storage to mass rail with a total worth of $444 billion. All of these projects are planned to happen right in this decade.
The last time, when Malaysia saw its growth surpassing 5% for 7 straight quarters was in 2007 and 2008. According to Santitarn Sathirathai, the Economist of Credit Suisse, strong rebounds are expected to be seen in the 2nd half of 2013. The investment growth should be boosted by several businesses after conclusion of the election. These businesses are expected to resume the capital spending activities as the uncertainty regarding elections has faded away. Sathirathai added that the investment in infrastructure sector should be huge as there are promising projects in the pipeline.