M3 Lower, Loan Growth Upward Trend Continues

Economic Research	1 June 2017
Malaysia
Economic Update
M3 Lower, Loan Growth Upward Trend Continues The growth of the broad money supply, M3, inched lower in April. This was on account of a lower demand for funds from government operations and the private sector. We envisage M3 growth to pick up to 4.5% in 2017 from 3% in 2016 (2015: 2.6%). This is on the back of stronger economic growth. Meanwhile, loan growth is expected to grow by a quicker pace of around 5.5-6% in 2017 from 5.3% in 2016, and compared with 7.9% in 2015. This is on account of stronger business loans due to a pick-up in economic activity. This was offset partly by slower household loans – as banks maintain stringent rules on lending – and a softening property market. Economist:  Vincent Loo Yeong Hong  | +603 9280 2172 Economist:  Aris Nazman Maslan  | +603 9280 2184