Economic Highlights (Malaysia) - 25/04/2014

Business Conditions And Consumer Sentiment Improved In The 1Q

¨        The Malaysian Institute of Economic Research’s (MIER) business conditions index (BCI) rebounded by 11.1 percentage points to 103.1 in 1Q 2014, surpassing the 100 threshold point, after dropping by 6.6 percentage points in the 4Q, reversing its earlier downward trend.

¨        This marked the first reading above the threshold point of 100, following two consecutive quarters of decline, suggesting that businesses have turned more optimistic on the outlook, following the gradual improvement in external demand.

¨        The MIER’s consumer sentiments index (CSI) also rebounded by 14.4 percentage points to 96.8 in 1Q 2014, after diving by 19.6 percentage points to 82.4 in 4Q 2013.

¨        This suggests consumers are less perturbed by both the current economic conditions and expected conditions in the 1H of this year, despite the fiscal structural adjustment measures.

¨        In line with improvement in both MIER's CSI and BCI surveys, domestic demand will continue to be the key driver of growth, while improving external demand and continued strong private investment will lend support to growth.

¨        As a whole, we expect real GDP to expand at a faster rate of 5.4% in 2014, after moderating to +4.7% in 2013, supported by better performance in the external sector amid some moderation in domestic demand.

Link to the report:  Business Conditions And Consumer Sentiment Improved In The 1Q

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