Malaysia economy grows 4-5%

KUALA LUMPUR, 23 March 2012 - Malaysia's economy is projected to grow at a steady four to five per cent this year, anchored by the resilient domestic demand, says Bank Negara Malaysia.

The central bank said private investments would be supported by domestic-oriented industries and the ongoing implementation of projects under the Economic Transformation Programme (ETP).

Most sectors would continue to expand this year, it said in the 2011 Annual Report released today.

Domestic-oriented industries' performance is expected to remain firm, particularly the construction sector, projected to record stronger growth, backed by the implementation of major infrastructure projects and the Special Stimulus Package, it said.

While the mining sector's growth is expected to recover, the agriculture sector is likely to register a moderate growth on lower growth for both palm oil and rubber following the strong performance seen last year.

On the external front, the current account surplus is projected to remain large at RM109.5 billion or 12.2 per cent of the Gross National Income (GNI), it said.

Although gross exports are expected to record a slower growth this year, the trade account surplus would remain large, it said, adding that the surplus would be primarily supported by commodities' exports and non-E&E manufactured products.

Bank Negara also said labour market conditions are expected to soften this year pursuant to slower economic activities. Unemployment rate is projected to increase to 3.2 per cent this year.

Job creation is projected to be concentrated in the domestic-oriented sectors, particularly in the services and construction sectors, while headline inflation is expected to moderate this year, averaging between 2.5 per cent and 3.0 per cent.

Bank Negara said the monetary policy would continue to facilitate economic growth, manage risks towards inflation and financial imbalances build-up.

Should the global economy enters a new phase of even weaker growth this year and adversely affect the Malaysian economic outlook, the Monetary Policy Committee at the central bank has the flexibility to respond to adjust the degree of monetary accommodation, it said.

With the launch of the new Malaysian currency series, Bank Negara has also engaged closely with banks, businesses and cash-handling vendors to ensure a smooth transition to the new coins and notes coming into circulation this year.

As part of efforts to enhance international cooperation, the central bank continues to be involved in technical collaborations with external agencies and central banks from other emerging economies, particularly in Islamic finance, organisational development, financial inclusion, consumer protection and financial education.

Meanwhile, Bank Negara's financial position, as audited and certified by the Auditor-General, remained strong last year. The bank's total assets were RM473 billion for the financial year ended Dec 31, 2011.

It declared a RM2 billion dividend to the government for last year.

Source: Business Times

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Greater Kuala Lumpur
ASEAN's rising hub for talent and innovation
What Investors Say
  • Philippe Salle
    Philippe Salle
    Chairman and Chief Executive Officer, Altran Group

    "We have decided to open a regional office in Kuala Lumpur as the city is the launch pad to Southeast Asia.

    "With an attractive ecosystem for inward investment, world-class infrastructure, strong economic frameworks and access to the rest of the ASEAN region, Kuala Lumpur will offer a fitting environment for Altran to continue to grow our presence in the market across our key business areas – aviation, automotive, healthcare, telecoms and smart society.

  • Naeem Shahab Khan
    Naeem Shahab Khan
    Managing Director, Philips Malaysia Sdn Bhd

    "As a facilitator of investments into Greater Kuala Lumpur, InvestKL has been an excellent partner.

    "Their ability to bring outside-in perspective, understanding of MNCs' constrains and a consultative behaviour is commendable. GKL is also one of the best places to nurture talent for innovation. With a more structured industry driven education system, this can be enhanced.

  • Bill Herzig
    Bill Herzig
    Chairman, Darden Aquafarm Inc

    "Kuala Lumpur is a tremendous, vibrant city. The people are very diverse and embrace people from all walks of life.

    "Kuala Lumpur is both very cosmopolitan and at the same time very warm and friendly. There are a wide variety of cultural activities and opportunities, transportation is good and improving, and prices are reasonable. It is a safe city and the government is very forward thinking.

  • Tan Kee How
    Tan Kee How
    Managing Director, Oleon (Asia Pacific) Sdn Bhd

    "Greater Kuala Lumpur has well established Infrastructure in terms of logistics and IT; there is easy availability of talent for regional roles, and availability of related service providers which are critical factors for our business.

    "In addition, the ease of doing business; the simplicity of company registration, the stable government policies (which do not change every few months) and the freedom and ease of fund transfers are great advantages of doing business in Malaysia. InvestKL has also been very efficient and very responsive in meeting our requirements.

  • Yong Tong Nye
    Yong Tong Nye
    Assistant GM (Finance & Admin Division),
    Epson Precision Malaysia Sdn Bhd

    "Greater Kuala Lumpur is a great place for our business; Malaysia has investor friendly policies, attractive and competitive tax incentives, and good infrastructure.

    "Having been in Malaysia since 1975, we have seen numerous timely reforms carried out by the government to ease domestic regulations which allow the private sector to continuously grow their businesses.

    We rate the ease of doing business in Kuala Lumpur 8 out of 10.

  • Jamal A. Ainul
    Jamal A. Ainul
    Chairman, Schlumberger Asia

    "We are projecting stronger revenue growth from Asia following our investments in Malaysia.

    "Our manufacturing plant in Penang and regional financial hub in Kuala Lumpur will play a key role in supporting our clients in Malaysia, Asia and the Middle East, and in the expansion of our business in these key markets.

    "Malaysia is also ideal for our financial hub as it offers highly qualified financial professionals with excellent customer service attitudes. The country is open to attracting knowledge-based activities and offers an excellent business environment, with a Government committed to the development of education and infrastructure."

    • Duration: 2:23
  • Craig Tucker
    Craig Tucker
    Director, IBM Global Delivery Centre, Cyberjaya (Malaysia)

    “This centre is critical to IBM’s ability to offer our clients support at any level local, regional and global to provide the flexibility, scalability and security our clients expect.

    "We selected Malaysia for our newest facility based on the strong public-private partnership with the country and Cyberjaya, its competitive business model, and the talent and skills that the Malaysian people have to offer.

    “The global delivery centres are a major component of IBM’s strategy to be a globally integrated enterprise, which allows us to perform work anywhere in the world where we have the right skills and the right environment for business to drive profitable growth. Our new center in Cyberjaya is now a core component of that global network. We believe it will be a model for the delivery of technology services and just as importantly, it will be role model for a public/private partnership that creates new opportunities for Malaysians.”

    • Duration: 1:10
    • Duration: 1:52
  • Jamal A. Ainul
    Mr Hiroyuki Mogi
    Chairman of Toshiba Transmission & Distribution Systems Asia

    “T&D technology can be highly value–added and currently manufacturing of complex high voltage (HV) T&D equipment is mostly done in Europe and Japan.

    “Toshiba Corporation has selected Malaysia as a global supply chain hub, regional full turnkey (FTK) center and an R&D center for its T&D equipment due to the availability of excellent technical resources and its strategic location to address the fast growing ASEAN market for these products.

    “Malaysia is one of the established T&D markets in the ASEAN region, and established reputation of Malaysian-made products supports the manufacturing requirements in the industry.”

  • John McCabe
    John McCabe
    Senior Vice-President, Worldwide Operations, PayPal

    "We chose Malaysia as its multi-lingual and skilled workforce is ideal for our regional and global support services.

    "Our regional center in Kuala Lumpur offers service and support for customers across Southeast Asia. It also provides operational support for our global payment service.

    "This demonstrates our commitment to offer a safer, more secure online payment platform to millions of customers in the region, especially in Southeast Asia."

  • Sanjeev Nanavati
    Sanjeev Nanavati
    former CEO, Citibank Berhad

    "Citibank remains committed to our customers and will continue with our investments to grow our business in Malaysia.

    "Throughout our 50 over years in Malaysia and as one of the leading foreign banks in Malaysia, Citibank has been an active contributor and leading player in the dynamic growth of the local banking industry.

    "There are significant business opportunities in Malaysia as we look forward to continuing to invest in Malaysia as the economy transforms under the Economic Transformation Programme."

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