KUALA LUMPUR: The outstanding 5.6 per cent growth performance of the Malaysian economy in 2012 has led several research houses to revise upwards their growth performance for 2013.
Research houses were taken aback by the 6.4 per cent growth in the fourth quarter of 2012, after tracking 5.1, 5.6 and 5.3 per cent year-on-year growths in the first three quarters of the year.
The performance was boosted by private spending and investments and the 20 respondents on the Business Times poll expect the positive growth momentum to continue in 2013, prompting some revisions to the earlier forecasts.
Given the strong growth momentum, Singapore-based UOB Bank economist Ho Woei Chen said the forecast has been revised upwards to 5.5 per cent from 5.0 per cent previously.
"We believe firm labour market conditions, domestic income growth and investments generated through the Economic Transformation Programme will remain the key growth drivers," she said.
Recent agreement of a high-speed rail link between Kuala Lumpur and Singapore will likely contribute to the positive sentiment in Malaysia.
"We expect infrastructure development to continue to bolster Malaysia's economic growth in the next few years."
Ho said barring any major surprises in the impending general election, growth will continue to find support from investment and consumption.
Nomura Research is also looking to upside risks to its GDP forecast because of the strong momentum.
"However, the path should be similar to growth slowing more in the second half as significant fiscal consolidation after the election poses a headwind to growth."
This effect is already starting to become evident with the slowdown in private consumption growth in the fourth quarter.
TA Research was, however, less optimistic about the growth forecast for 2013 and the research house has revised its projection to a moderated growth of 5.0 per cent from its earlier projection of 5.2 per cent.
Economist Patricia Oh explained that it was mainly due to the stronger base seen in 2012 as growth at 6.4 per cent (in the fourth quarter) and 5.6 per cent (for 2012) were well above expectations.
Standard Chartered Bank expects growth to moderate to 4.2 per cent (from 5.4 per cent in the same period for the first half of 2012) in the first half of the year before rebounding.
Malaysia's Leading Index has stagnated in recent months and StanChart has attributed it to weakening outlooks for approved housing permits, expected manufacturing receipts, new companies registered and the benchmark equity index.
But it is optimistic about the export sector in 2013 after the below-trend performance last year, and this will improve the growth prospects further.