M3 Slows, Whilst Loan Growth Picks Up in June

Economic Research	1 August 2017
Malaysia
Economic Update
M3 Slows, Whilst Loan Growth Picks Up in June The growth in broad money supply, or M3, slowed to 4.3% YoY in June on account of a decline in demand for funds for external operations. Meanwhile, demand for funds from government operations also eased during the month. We envisage M3 growth to pick up to 4.5% in 2017 from 2016’s 3% (2015: 2.6%) on the back of stronger economic growth. Loans are expected to grow by a quicker pace of 5.7% in 2017 (2016: 5.3%) and compared with 2015’s 7.9%. This is mainly on stronger business loans due to a pick-up in economic activity. However, this was partly offset by slower household loans, as the banks maintained stringent lending rules. Economist:  Vincent Loo Yeong Hong  | +603 9280 2172 Economist:  Aris Nazman Maslan  | +603 9280 2184