Malaysia\\\'s economy beat forecasts on domestic demand

KUALA LUMPUR, Feb 12 (AFP): Malaysia's economy expanded at a better-than-expected 5.8 per cent in the last quarter of 2014 thanks to strong domestic demand, the central bank said Thursday, helping the country to its best annual performance in four years.

The news will come as welcome relief for the government, which has recently unveiled measures to help the petroleum-exporting country cope with the recent plunge in global oil prices.

The October-December growth in Southeast Asia's third biggest economy was better than the 5.6 per cent tipped by analysts in a Bloomberg News survey. The annual rate of 6.0 per cent also surpassed the 5.8 percent forecast and was the best performance since 7.4 per cent growth in 2010.

Bank Negara said "domestic demand remained the anchor of growth in the fourth quarter", with analysts pointing to solid performances in the construction, services and manufacturing sectors.

"The Malaysian economy is expected to remain on a steady growth path," the central bank said. "The gradual recovery in global growth will lend support to manufactured export performance, although overall export growth would likely remain modest amid lower commodity prices."

Economists have tipped growth to slow this year owing to plunging price of oil and other commodities as well as weakness in key overseas markets including China, Europe and Japan.

"This year we will see a slower growth of about 5.1 per cent because of weak oil and commodity prices. The uncertainty in the global economy including in major Asian economies could also hurt ... exports," Kenanga Research economist Wan Suhaimi Saidi told AFP.

Malaysia trimmed its 2015 growth forecast to a 4.5-5.5 per cent, from an earlier projection of up to six percent in response to the sharp fall in oil prices.