M3 And Loan Growth See Moderation

Economic Research	3 April 2017
Malaysia
Economic Update
M3 And Loan Growth See Moderation Growth in broader money supply, M3, slowed in February, on account of a slowdown in demand for funds by the private sector. We envisage M3 growth to pick up to 4.5% in 2017, from 3% in 2016 (2.6% in 2015), on the back of stronger economic growth. Meanwhile, loan growth is expected to slow to around 4.5% in 2017, from 5.3% in 2016, and compared with 7.9% in 2015, on account of: 1.   Slower household loans, as banks maintain stringent rules on lending, and a softening property market; 2.   Moderating business loans due to a modest business environment. We expect headline inflation rate to pick up to 3% in 2017, from +2.1% in 2016 in view of several recent cost-push developments that would bolster inflationary pressure. Economist:  Vincent Loo Yeong Hong  | +603 9280 2172 Economist:  Aris Nazman Maslan  | +603 9280 2184