Slowdown in Loan Growth Continues, Whilst Money Supply Eased in June

Economic Research	1 August 2016
Malaysia
Economic Highlights
Slowdown in Loan Growth Continues, Whilst Money Supply Eased in June Growth of the broader money supply, M3, eased to 1.9% y-o-y in June, from +2.2% in May and compared to +1.4% in April, due to a slowdown in demand for funds by the private sector and external operations. Moving forward, we expect M3 to recover at a gradual pace of 4.0%-5.0% in 2016, above the +2.7% registered last year, as capital outflows moderate. In contrast, loan growth eased further to 5.6% y-o-y in June, the weakest in nine years, from +6.2% in May and compared with +6.3% in April. This was attributed to a deceleration in growth of corporate loans, made worse by the ongoing consolidation of household loans during the month. Economist:  Vincent Loo Yeong Hong  | +603 9280 2172 Economist: Aris Nazman Maslan | +603 9280 2184
To access our recent reports please click on the links below: 21 July :  Inflation Eased For The Fourth Straight Month in June 13 July :  BNM Surprises With A 25bps OPR Cut 12 July:  Industrial Production Eased In May, Despite Improvement In Manufacturing Activities 8 July    : Marginal Fall In June’s Foreign Exchange Reserves 1 July    : Bank Lending Growth Consolidates While Money Supply Rise