CONSENSUS FORECAST - FocusEconomics · Bank Negara Malaysia stated that global economic growth...

CONSENSUS FORECAST

MALAYSIA 2CALENDAR 12NOTES 14

ContributorsARNE POHLMAN Chief EconomistARMANDO CICCARELLI Head of ResearchRICARDO ACEVES Senior EconomistRICARD TORNÉ Senior Economist

OLGA COSCODAN EconomistCARL KELLY EconomistTERESA KERSTING EconomistDIRINA MANÇELLARI Economist

ANGELA BOUZANIS EconomistCECILIA SIMKIEVICH EconomistMIRIAM DOWD Editor

PUBLICATION DATE 24 March 2015FORECASTS COLLECTED 18 March - 23 March 2015

INFORMATION AVAILABLE Up to and including 23 March 2015 NEXT EDITION 28 April 2015

Malaysia • April 2015

FOCUSECONOMICS Malaysia

FocusEconomics Consensus Forecast | 2

April 2015

Malaysia

REAL SECTOR | Growth in industrial production moderates in JanuaryIndustrial production increased 7.0% in January over the same month of last year. The figure came in below the 7.4% increase tallied in December and was in line with market expectations. January’s increase was driven by improvements in the mining and electricity sectors. Conversely, growth in manufacturing production slowed compared to the previous month.

On a monthly basis, industrial production decreased a seasonally-adjusted 1.6% in January, which contrasted the 1.9% rise registered in the previous month. Despite January’s deterioration, annual average growth in industrial production edged up from 5.1% in December to 5.4% in January, which marked the highest reading since February 2011.

FocusEconomics Consensus Forecast panelists project that industrial production will grow 3.8% in 2015, which is down 0.2 percentage points from last month’s projection. In 2016, the panel expects industrial output to expand 4.4%.

The government sees GDP growing between 4.5% and 5.5% in 2015. FocusEconomics Consensus Forecast panelists expect GDP to grow 4.9% in

Outlook moderates

LONG-TERM TRENDS | 3-year averages

Cecilia SimkievichEconomist

Malaysia

2011-13 2014-16 2017-19Population (million): 29.5 31.0 32.6GDP (USD bn): 304 333 445GDP per capita (USD): 10,385 10,668 13,640GDP growth (%): 5.2 5.3 5.1Fiscal Balance (% of GDP): -4.4 -3.3 -2.7Public Debt (% of GDP): 53.2 53.1 50.7Inflation (%): 2.3 3.0 2.8Current Account (% of GDP): 7.1 3.8 3.2External Debt (% of GDP): 53.3 65.4 53.5

The Malaysian economy recorded a solid 6.0% expansion last year, accelerating from the 4.7% increase tallied in the previous year. Recent data suggest that the economy has lost some momentum in the first months of the year. Industrial production moderated in January, whereas exports posted the worst performance in almost two years. Looking forward, low oil prices will continue to weigh on the country’s balance of payments as well as on its fiscal accounts. Moreover, the government recently decided to increase its 2015 fiscal deficit target from 3.0% of GDP to 3.2% of GDP on the expectation of lower oil revenues.

The Malaysian economy is expected to post healthy growth again this year, although it will decelerate from the strong expansion recorded in 2014. FocusEconomics Consensus Forecast panelists expect GDP to expand 4.9% in 2015, which is down 0.1 percentage points from last month’s forecast. For 2016, the panel sees GDP growing 5.1%.

Inflation fell from 1.0% in January to 0.1% in February, which marked an over-five-year low. Inflationary pressures are expected to increase after the Goods and Services Tax (GST) is introduced in April. At its 5 March meeting, the Central Bank decided to maintain the overnight rate unchanged at 3.25%. The decision came amid ongoing currency weakness and the imminent normalization of the U.S. Federal Reserve’s monetary policy. FocusEconomics Consensus Forecast panelists expect inflation to average 3.0% both in 2015 and 2016.

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Jan-13 Jul-13 Jan-14 Jul-14 Jan-15

Year-on-year

Annual average

%

Industrial Production | variation in %

Note: Annual changes of industrial production index and annual average growth rate in %.Source: Department of Statistics Malaysia (DSM).



April 2015

2015, which is down 0.1 percentage points from last month’s projection. For 2016, the panel foresees the economy growing 5.1%.

MONETARY SECTOR | Inflation drops to over-five-year low in FebruaryConsumer prices declined 0.6% in February over the previous month, which marked a less-pronounced drop than the 1.1% fall tallied in January. As in the previous month, February’s result was mainly driven by a sharp fall in prices for transport. Prices for food and non-alcoholic beverages as well as for non-durable goods also dropped compared to the previous month. Conversely, prices for housing and healthcare were higher than in January.

Annual inflation dropped from 1.0% in January to 0.1% in February, which marked an over-five-year low. The result slightly undershot the 0.2% that the market had expected. As a result of February’s sharp slowdown, annual average inflation edged down from January’s 2.9% to 2.7% in February.

The government projects inflation to range between 2.5% and 3.5% in 2015. FocusEconomics Consensus Forecast panelists expect inflation to average 3.0% in 2015, which is down 0.5 percentage points from last month’s projection. For 2016, the panel sees inflation also averaging 3.0%.

MONETARY SECTOR | Central Bank holds rate steady at 3.25%At its 5 March monetary policy meeting, the Central Bank decided to leave the Overnight Policy Rate (OPR) unchanged at 3.25%. The decision was in line with market expectations.

Bank Negara Malaysia stated that global economic growth continues to expand at a moderate pace in spite of varying performance across countries. Downside risks to growth will likely emerge from the weakening of major economies such as China and Japan. On the domestic front, Malaysia’s economic growth continues to be supported mainly by domestic demand, while exports moderated in the last quarter of 2014. The Bank pointed out that, “going forward, domestic demand will remain as a key driver of growth. While the introduction of the Goods and Services Tax and the lower earnings in the commodity sector are expected to have some impact on private consumption, household spending will continue to be supported by the steady increase in income and employment.”

Consumer prices declined further in January and the Central Bank recognized that inflation will likely remain low in the first quarter of the year. The Bank stated that inflation is likely to trend higher in the subsequent quarters as, “lower fuel prices will partially offset other domestic cost factors.” However, prices are expected to remain below their historical average throughout the year.

Finally, the Bank remarked that, “the current stance of monetary policy remains accommodative and is assessed to be appropriate given the developments in monetary and financial conditions.” The Bank signaled that it would remain vigilant regarding external and domestic developments to ensure that its monetary policy stance is consistent with any changes in the economy’s growth outlook

Panelists expect the monetary policy rate to end this year at 3.24%. The panel expects the policy rate to end 2016 at 3.32%.

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Inflation | Consumer Price Index

Note: Annual and monthly variation of consumer price index in %.Source: Department of Statistics Malaysia (DSM).

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%

Monetary Policy Rate | in %

Note: Overnight Policy Rate in %.Source: Bank Negara Malaysia (BNM).



April 2015

MONETARY SECTOR | Malaysian ringgit continues to weaken in 2015, hits multi-year low in MarchThe Malaysian ringgit (MYR) hit a multi-year low of 3.71 MYR per USD on 16 March, which was 3.5% weaker than on the same day of the previous month and 13.0% weaker on an annual basis. Moreover, the ringgit was the second poorest performing Asian currency in Q1 2015 after the Indonesian rupiah. The MYR has depreciated 6.0% against the USD so far this year, and the expected upcoming hike in the U.S. Federal Reserve’s interest rates will likely lead the currency to weaken further in the coming months.

The depreciation of the Malaysian ringgit began in the second half of 2014 when global prices for oil started to decline. As a net oil exporter, Malaysia has particularly felt the impact of the fall in energy prices. Exports decelerated markedly throughout 2014 and that led to a significant deterioration in external accounts, which translated into a weaker ringgit. On top of this, the MYR has also been affected by the strengthening of the U.S. dollar, resulting from solid economic growth in the U.S. Against that background, the Malaysian ringgit has been losing value uninterruptedly since August last year: from a peak of 3.16 MYR per USD on 22 August 2014, the currency depreciated 17.0% to a low of 3.71 MYR per USD on 16 March 2015.

FocusEconomics Consensus Forecast panelists expect the Malaysian ringgit to end 2015 at 3.60 MYR per USD. The panel sees the Malaysian currency closing 2016 at 3.54 MYR per USD.

EXTERNAL SECTOR | Exports continue to deteriorate in JanuaryExports declined 8.2% in annual terms in January, which was down from the 5.0% contraction tallied in December. The result undershot market expectations and marked the lowest reading in almost two years. According to the Department of Statistics, the deterioration in exports was mainly driven by a decline in shipments of refined petroleum products, liquefied natural gas, rubber, and palm oil. Conversely, exports of electronic products increased compared to the same month of last year. Meanwhile, imports tumbled from a 3.6% drop in December to a 12.5% contraction in January, which marked the lowest reading in over five years.

The trade balance fell from a USD 2.6 billion surplus in December to a USD 2.5 billion surplus in January (January 2014: USD 1.9 billion). The 12-month moving sum of the trade balance ticked up from a USD 25.3 billion surplus in December to a USD 25.9 billion surplus in January.

FocusEconomics Consensus Forecast panelists expect exports to drop 1.3% in USD terms in 2015. Imports are expected to drop 1.2% in 2015, pushing the trade surplus to USD 24.8 billion. For 2016, the panel expects exports to grow 7.3%. With imports expected to rise 7.0% in 2016, panelists see the trade surplus widening to USD 27.3 billion.

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Trade balance (USD bn, left scale)Exports (yoy, right scale)Imports (yoy, right scale)

%

Merchandise Trade

Note: 12-month trade balance in USD billion and annual variation of the 12-month sum of exports and imports.Source: Department of Statistics Malaysia (DSM) and FocusEconomics calculations.

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Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15

Exchange Rate | USD per MYR

Note: Daily spot of U.S. dollar (USD) against Malaysian ringgit (MYR).Source: Bank Negara Malaysia (BNM).



April 2015

Economic Indicators | 2010 - 2019

Annual Data 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019Real SectorPopulation (million) 28.6 29.1 29.5 29.9 30.5 31.0 31.5 32.0 32.6 33.1GDP per capita (USD) 8,176 9,984 10,555 10,616 10,566 10,337 11,103 12,263 13,721 14,935GDP (USD bn) 247 291 306 314 329 320 350 393 447 495GDP (MYR bn) 797 885 942 987 1,070 1,161 1,255 1,355 1,462 1,573Economic Growth (Nominal GDP, ann. var. in %) 11.8 11.0 6.4 4.8 8.4 7.9 8.0 8.0 7.9 7.6Economic Growth (GDP, annual var. in %) 7.4 5.2 5.6 4.7 6.0 4.9 5.1 5.1 5.1 5.0Private Consumption (ann. var. in %) 6.9 6.9 8.2 7.2 7.1 5.8 5.8 5.6 5.6 5.5Fixed Investment (ann. var. in %) 11.9 6.3 19.2 8.5 4.7 4.8 5.4 5.7 5.9 6.2Industrial Production (annual var. in %) 7.2 1.2 2.8 3.4 5.1 3.8 4.4 4.7 4.7 4.9Unemployment (% of active population, eop) 3.2 3.0 3.0 3.0 3.0 3.0 3.0 2.9 2.8 2.8Fiscal Balance (% of GDP) -5.4 -4.8 -4.5 -3.9 -3.5 -3.4 -3.0 -2.9 -2.7 -2.6Public Debt (% of GDP) 51.1 51.5 53.3 54.7 53.7 53.0 52.5 51.6 50.8 49.8Monetary and Financial Sector Money (annual variation of M2 in %) 7.2 14.7 9.7 7.7 7.5 - - - - -Inflation (CPI, annual variation in %, eop) 2.0 3.0 1.3 3.2 2.7 - - - - -Inflation (CPI, annual variation in %, aop) 1.6 3.2 1.7 2.1 3.1 3.0 3.0 2.8 2.8 2.7Inflation (PPI, annual variation in %, aop) 5.6 9.0 0.0 -2.0 1.2 - - - - -Overnight Policy Rate (%, eop) 2.75 3.00 3.00 3.00 3.25 3.24 3.32 3.43 3.66 3.913-Month KLIBOR (%, eop) 2.96 3.19 3.16 3.19 3.72 3.69 3.80 4.13 4.38 4.3910-Year Bond Yield (%, eop) 4.04 3.70 3.50 4.15 4.14 4.13 4.15 4.45 4.63 4.72Stock Market (var. of FTSE BM KLCI in %) 42.4 20.7 0.1 7.0 10.8 - - - - -Exchange Rate (MYR per USD, eop) 3.08 3.17 3.06 3.28 3.50 3.60 3.54 3.32 3.19 3.14Exchange Rate (MYR per USD, aop) 3.22 3.06 3.09 3.15 3.27 3.61 3.57 3.43 3.25 3.16External Sector Current Account Balance (% of GDP) 10.9 11.6 5.8 4.0 4.6 3.1 3.7 3.6 3.0 2.9Current Account Balance (USD bn) 26.9 33.7 17.8 12.6 15.2 10.1 12.9 14.0 13.5 14.2Trade Balance (USD bn) 34.1 40.5 31.1 22.4 25.3 24.8 27.3 29.3 30.8 32.9Exports (USD bn) 199 228 228 229 234 231 248 267 287 310Imports (USD bn) 165 187 197 206 209 206 221 237 256 277Exports (annual variation in %) 26.5 14.4 0.0 0.4 2.5 -1.3 7.3 7.5 7.7 8.0Imports (annual variation in %) 33.3 13.5 5.0 4.9 1.4 -1.2 7.0 7.4 8.0 8.2International Reserves (USD bn) 107 134 140 135 116 113 117 117 125 129International Reserves (months of imports) 7.8 8.6 8.5 7.9 6.7 6.6 6.4 5.9 5.8 5.6External Debt (USD bn) 73.6 81.2 196.9 212.7 213.0 217.9 221.1 223.8 238.4 248.1External Debt (% of GDP) 29.8 27.9 64.3 67.8 64.8 68.1 63.2 57.0 53.3 50.1

Quarterly Data Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16Economic Growth (GDP, annual var. in %) 5.6 5.8 5.4 5.1 4.9 4.7 4.8 5.0 5.2 5.2Inflation (CPI, annual variation in %, aop) 3.0 2.8 2.1 3.1 3.3 3.5 3.9 2.8 2.5 2.5Overnight Policy Rate (%, eop) 3.25 3.25 3.25 3.24 3.24 3.24 3.29 3.30 3.30 3.323-Month KLIBOR (%, eop) 3.68 3.72 3.71 3.71 3.71 3.69 3.78 3.80 3.80 3.8010-Year Bond Yield (%, eop) 3.91 4.14 4.13 4.13 4.13 4.13 4.13 4.13 4.14 4.15Exchange Rate (MYR per USD, eop) 3.28 3.50 3.67 3.60 3.60 3.60 3.59 3.56 3.55 3.54Trade Balance (USD bn) 5.3 6.4 6.7 5.8 5.4 2.6 5.0 6.0 6.5 6.0Exports (USD bn) 60.1 58.7 54.3 56.3 57.1 56.1 56.0 62.0 64.0 65.0Imports (USD bn) 54.7 52.3 47.6 50.5 51.7 53.5 51.0 56.0 57.5 59.0Exports (annual variation in %) 5.4 -3.9 -4.5 -5.5 -4.9 -4.5 3.1 10.1 12.1 15.9Imports (annual variation in %) 6.6 0.1 -2.7 -6.2 -5.5 2.4 7.2 10.9 11.2 10.2

Monthly Data May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15Industrial Production (annual variation in %) 5.9 7.0 0.6 6.5 5.4 5.1 4.8 7.4 7.0 -Inflation (CPI, mom variation in %) 0.1 0.2 0.1 0.2 0.2 0.5 0.5 -0.1 -1.1 -0.6Inflation (CPI, annual variation in %) 3.2 3.3 3.2 3.3 2.6 2.8 3.0 2.7 1.0 0.1Exchange Rate (MYR per USD, eop) 3.22 3.21 3.20 3.15 3.28 3.29 3.38 3.50 3.63 3.61Trade Balance (USD bn) 1.7 1.3 1.1 1.2 2.9 0.4 3.3 2.6 2.5 -Exports (annual variation in %) 8.4 4.6 1.1 5.7 3.9 -6.1 -2.3 -5.0 -8.2 -Imports (annual variation in %) 4.1 5.5 -0.4 11.7 3.0 5.9 -4.2 -3.6 -12.5 -

The Central Bank (BNM, Bank Negara Malaysia) introduced a new definition for external debt in Q1 2014. Historical data are only available starting in 2012.



April 2015

Real Sector | Gross Domestic Product

1 | Real GDP | 2000 - 2019 | var. in %

3 | GDP 2015 | evolution of forecasts

5 | Consumption | variation in %

7 | Consumption | evolution of fcst

2 | Real GDP | Q1 12-Q4 16 | var. in % Real GDP growth in %

4 | GDP 2016 | evolution of forecasts

6 | Investment | variation in %

8 | Investment | evolution of forecasts

Notes and sources

General: Long-term chart period from 2000 to 2019 unless otherwise stated. All real sector data are from the Department of Statistics Malaysia (DSM) and the Central Bank (BNM, Bank Negara Malaysia). See below for details. Forecasts based on FocusEconomics Consensus Forecast. 1 GDP, annual variation in %. Source: DSM.2 Quarterly GDP (not seasonally adjusted), year-on-year variation in %.

Source: DSM.3 GDP, evolution of 2015 forecasts during the last 18 months.4 GDP, evolution of 2016 forecasts during the last 18 months.5 Private consumption, annual variation in %. Source: DSM.6 Gross fixed investment, annual variation in %. Source: DSM.7 Private consumption, change in 2015 and 2016 forecasts during the last

18 months.8 Gross fixed investment, change in 2015 and 2016 forecasts during the

last 18 months.9 Industrial production, annual variation in %. Source: DSM.10 Unemployment, % of active population. Source: DSM.11 Balance of central government as % of GDP. Source: BNM.12 Industrial production, evolution of 2015 and 2016 forecasts during the

last 18 months.13 Unemployment, evolution of 2015 and 2016 forecasts during the last 18

months.14 Balance of central government as % of GDP, evolution of 2015 and

2016 forecasts during the last 18 months.

Individual Forecasts 2015 2016ANZ 4.5 5.1BofA Merrill Lynch 4.6 5.2Capital Economics 5.0 4.5Citigroup Global Mkts 5.0 5.0Credit Agricole 5.5 5.5Credit Suisse 4.4 5.4Daiwa 5.0 5.5DBS Bank 4.9 5.0Deutsche Bank 4.5 4.5EIU 5.5 5.6Frontier Strategy Group 4.9 4.8Goldman Sachs 5.1 5.1HSBC 4.8 5.5ING 5.0 5.0JPMorgan 4.6 5.0Kenanga Investment Bank 5.1 -Maybank Investment Bank 5.0 -MIER 5.0 5.8Morgan Stanley 5.3 5.4Nomura 4.7 4.3OCBC Bank 4.8 -Oxford Economics 4.8 4.1RHB Research Institute 5.0 5.5Standard Chartered 5.0 5.3UBS 4.4 4.3United Overseas Bank 4.7 5.3SummaryMinimum 4.4 4.1Maximum 5.5 5.8Median 5.0 5.1Consensus 4.9 5.1History30 days ago 5.0 5.060 days ago 5.0 5.190 days ago 5.1 5.1Additional ForecastsGovernment (Jan. 2015) 4.5 - 5.5 -IMF (Oct. 2014) 5.2 5.0ADB (Dec. 2014) 5.3 -

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April 2015

Real Sector | Additional forecasts

Individual Forecasts 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016ANZ - - - - - - - - - -BofA Merrill Lynch 5.2 5.7 2.9 4.4 - - 2.8 2.8 -3.8 -3.5Capital Economics 5.5 5.0 5.0 5.0 - - 3.0 3.0 -3.2 -3.2Citigroup Global Mkts 5.9 6.3 - - - - 2.9 3.0 -3.2 -2.5Credit Agricole - - - - - - - - - -Credit Suisse 5.5 5.8 1.7 3.6 - - - - -3.2 -3.0Daiwa - - - - - - - - -3.3 -3.0DBS Bank 6.0 6.4 4.4 5.6 - - - - -3.2 -2.8Deutsche Bank 4.2 6.2 5.2 6.2 1.6 2.4 3.1 3.0 -3.4 -2.8EIU 6.8 6.5 5.4 6.0 5.0 5.2 2.8 2.8 -4.7 -3.9Frontier Strategy Group 6.3 6.2 - - 4.1 4.0 3.1 3.1 - -Goldman Sachs - - - - - - - - - -HSBC 6.3 5.2 4.8 6.4 5.5 5.5 3.0 3.3 -3.4 -3.0ING - - - - - - - - - -JPMorgan - - - - - - - - -3.2 -Kenanga Investment Bank 6.2 - - - 3.3 - 3.1 - -3.5 -Maybank Investment Bank 6.3 - 7.2 - - - 3.0 - -3.3 -MIER 6.3 6.4 7.8 8.3 - - 2.8 2.8 - -Morgan Stanley 6.2 6.5 4.5 5.5 - - - - -3.0 -2.5Nomura 5.9 5.6 4.9 3.5 - - 3.0 3.0 -3.0 -2.5OCBC Bank 5.8 - 6.3 - - - - - - -Oxford Economics 4.6 4.4 3.7 4.0 4.0 4.1 3.0 3.0 -3.3 -3.2RHB Research Institute 5.2 5.3 5.9 8.6 4.7 5.7 3.0 3.0 -3.2 -2.5Standard Chartered - - - - - - - - - -UBS 5.6 4.8 2.1 2.5 2.6 4.1 - - -3.6 -4.1United Overseas Bank - - - - - - 2.9 2.7 -3.2 -2.7SummaryMinimum 4.2 4.4 1.7 2.5 1.6 2.4 2.8 2.7 -4.7 -4.1Maximum 6.8 6.5 7.8 8.6 5.5 5.7 3.1 3.3 -3.0 -2.5Median 5.9 5.8 4.9 5.5 4.0 4.1 3.0 3.0 -3.2 -3.0Consensus 5.8 5.8 4.8 5.4 3.8 4.4 3.0 3.0 -3.4 -3.0History30 days ago 5.8 5.6 4.5 5.2 4.0 4.4 2.9 3.0 -3.3 -2.960 days ago 5.9 5.6 5.4 5.9 4.0 4.4 2.9 3.0 -3.1 -2.890 days ago 5.6 5.6 5.8 6.4 4.1 4.3 3.0 3.0 -3.1 -2.8

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Consumption variation in %

Investment variation in %

Fiscal Balance % of GDP

Industry variation in %

Unemployment % of active pop.

12 | Industry | evolution of forecasts

9 | Industry | variation in %

13 | Unemployment | evolution of fcst

10 | Unemployment | % of active pop.

14 | Fiscal Balance | evolution of fcst

11 | Fiscal Balance | % of GDP

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April 2015

Monetary Sector | Inflation

Inflation | annual avg. var. of consumer price index in %

Notes and sources

General: Long-term chart period from 2000 to 2019 unless otherwise stated. All monetary sector data are from the Department of Statistics Malaysia (DSM) and the Central Bank (BNM, Bank Negara Malaysia). See below for details. Forecasts based on FocusEconomics Consensus Forecast. 15 Inflation, annual average variation of consumer price index (CPI) in %.

Source: DSM.16 Inflation, annual variation of quarterly average consumer price index

(CPI) in %. Source: DSM.17 Inflation, evolution of 2015 forecasts during the last 18 months.18 Inflation, evolution of 2016 forecasts during the last 18 months.19 Producer price index, annual variation in % (aop). 2000-2014. Source:

DSM.20 Money, annual variation of M2 in %. 2000-2014. Source: BNM.21 Daily MSCI Price index in USD. From Jan. 2010 until end of previous

week. Source: MSCI Barra.22 Daily index levels, FTSE Bursa Malaysia KLCI. From Jan. 2010 until

end of previous week. Source: FTSE Bursa Malaysia.

Individual Forecasts 2015 2016ANZ 3.4 3.0BofA Merrill Lynch 2.3 3.0Capital Economics 3.5 3.0Citigroup Global Mkts 2.1 3.0Credit Agricole 4.4 3.1Credit Suisse 2.0 3.5Daiwa 4.5 2.7DBS Bank 3.4 3.0Deutsche Bank 1.4 2.5EIU 3.2 2.8Frontier Strategy Group 3.3 3.0Goldman Sachs 3.3 3.1HSBC 2.9 3.1ING 3.5 2.5JPMorgan 2.8 -Kenanga Investment Bank 2.7 -Maybank Investment Bank 4.5 -MIER 3.5 3.0Morgan Stanley 1.7 3.2Nomura 2.5 3.5OCBC Bank 3.3 -Oxford Economics 2.4 3.4RHB Research Institute 3.6 2.3Standard Chartered 4.0 3.0UBS 2.1 3.2United Overseas Bank 2.1 2.6SummaryMinimum 1.4 2.3Maximum 4.5 3.5Median 3.3 3.0Consensus 3.0 3.0History30 days ago 3.5 2.960 days ago 3.8 3.190 days ago 4.0 3.1Additional ForecastsGovernment (Jan. 2015) 2.5 - 3.5 -IMF (Oct. 2014) 4.1 3.5ADB (Dec. 2014) 3.6 -

15 | Inflation | 2000 - 2019 | in %

17 | Inflation 2015 | evolution of fcst

19 | Producer Prices | variation in %

21 | MSCI Price Index

16 | Inflation | Q1 12-Q4 16 | in %

18 | Inflation 2016 | evolution of fcst

20 | Money | variation in %

22 | Stock Market | FTSE BM KLCI

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April 2015

Monetary Sector | Interest Rate and Exchange Rate

Policy Interest Rate and Exchange Rate

Notes and sources

General: Long-term chart period from 2000 to 2019 unless otherwise stated. All monetary and external sector data are from the Department of Statistics Malaysia (DSM) and the Central Bank (BNM, Bank Negara Malaysia). See below for details. Forecasts based on FocusEconomics Consensus Forecast. 23 Interest rate, Central Bank Overnight Policy Rate in % (eop). Source:

BNM.24 Quarterly interest rate, Central Bank Overnight Policy Rate in % (eop).

Source: BNM.25 Interest rate, evolution of 2015 forecasts during the last 18 months.26 Interest rate, evolution of 2016 forecasts during the last 18 months.27 Exchange rate, MYR per USD (eop). Source: Thomson Reuters.28 Quarterly exchange rate, MYR per USD (eop). Source: Thomson Reuters.29 Exchange rate, evolution of 2015 forecast during the last 18 months.30 Exchange rate, evolution of 2016 forecast during the last 18 months.31 Current account balance as % of GDP. Source: DSM.32 Trade balance, imports and exports, in USD bn. Source: BNM.33 International reserves, months of imports. Source: BNM.34 Current account balance as % of GDP, evolution of 2015 and 2016

forecasts during the last 18 months.35 Exports, annual variation in %. Source: DSM.36 International reserves, in USD bn, evolution of 2015 and 2016 forecasts

during the last 18 months.

Individual Forecasts 2015 2016 2015 2016ANZ 3.25 3.50 3.60 3.65BofA Merrill Lynch 3.00 3.00 3.91 3.88Capital Economics 3.25 3.50 3.40 3.30Citigroup Global Mkts 3.25 3.50 3.69 3.61Credit Agricole 4.00 4.00 3.49 3.43Credit Suisse 3.25 3.50 3.67 3.67Daiwa 3.25 3.50 3.55 3.50DBS Bank 3.25 - 3.71 -Deutsche Bank 3.25 3.25 3.80 3.70EIU - - 3.35 3.18Frontier Strategy Group - - - -Goldman Sachs 3.25 3.25 3.70 3.70HSBC 3.00 3.00 3.75 3.80ING 3.25 3.25 3.84 3.88JPMorgan 3.00 - 3.70 -Kenanga Investment Bank 3.25 - 3.57 -Maybank Investment Bank 3.50 - 3.45 -MIER - - 3.57 -Morgan Stanley 2.75 2.75 3.53 3.40Nomura 3.25 3.25 3.50 3.47OCBC Bank - - - -Oxford Economics - - 3.47 3.29RHB Research Institute 3.25 3.50 3.35 3.20Standard Chartered 3.50 - 3.55 -UBS 3.00 3.00 3.50 3.55United Overseas Bank 3.25 - 3.80 -SummaryMinimum 2.75 2.75 3.35 3.18Maximum 4.00 4.00 3.91 3.88Median 3.25 3.25 3.57 3.55Consensus 3.24 3.32 3.60 3.54History30 days ago 3.28 3.38 3.54 3.4960 days ago 3.35 3.41 3.48 3.4090 days ago 3.39 3.43 3.37 3.35

Interest Rate Exchange Rate% MYR per USD

23 | Interest Rate | 2000 - 2019 | in %

25 | Int. Rate 2015 | evolution of fcst

27 | Exchange Rate | MYR per USD

29 | MYR per USD 2015 | evol. of fcst

24 | Interest Rate | Q1 12-Q4 16 | in %

26 | Int. Rate 2016 | evolution of fcst

28 | Exchange Rate | MYR per USD

30 | MYR per USD 2016 | evol. of fcst

2.5

3.0

3.5

4.0



2.5

3.0

3.5

4.0



2.5

3.0

3.5

4.0

4.5



3.0

3.2

3.4

3.6

3.8

Q1 12 Q1 13 Q1 14 Q1 15 Q1 16

2.9

3.1

3.3

3.5

Q1 12 Q1 13 Q1 14 Q1 15 Q1 16

3.0

3.2

3.4

3.6

3.8

4.0

2000 2005 2010 2015

1.5

2.5

3.5

4.5

2000 2005 2010 2015

2.5

3.0

3.5

4.0

4.5





April 2015

External Sector | Current Account, Trade and International Reserves

34 | Current Account | evol. of fcst 35 | Exports | annual variation in % 36 | Int. Reserves | evol. of fcst

Individual Forecasts 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016ANZ 1.8 4.0 - - - - - - - -BofA Merrill Lynch 3.5 5.5 18.0 20.0 232 248 214 228 118 130Capital Economics - - - - - - - - - -Citigroup Global Mkts 3.5 5.5 - - - - - - 118 122Credit Agricole 4.8 4.4 - - - - - - - -Credit Suisse 1.9 3.4 - - - - - - 105 115Daiwa 4.2 4.5 24.9 25.3 246 261 221 235 - -DBS Bank 5.0 5.0 28.0 34.0 218 226 190 192 111 119Deutsche Bank 3.3 1.9 - - - - - - 112 98EIU 3.8 4.0 36.1 38.3 245 262 209 224 126 128Frontier Strategy Group - - - - - - - - - -Goldman Sachs 4.3 4.2 - - - - - - - -HSBC 2.7 3.5 - - - - - - 114 114ING - - - - - - - - - -JPMorgan 1.9 - 28.2 - 229 - 200 - 110 -Kenanga Investment Bank 2.7 - 18.0 - 217 - 199 - - -Maybank Investment Bank 4.7 - 22.4 - 233 - 210 - - -MIER - - 22.5 20.6 239 247 217 226 - -Morgan Stanley - - 39.0 41.0 231 246 192 205 - -Nomura 3.3 2.7 - - - - - - - -OCBC Bank - - - - - - - - - -Oxford Economics 3.5 3.7 - - - - - - 111 121RHB Research Institute 2.3 2.1 19.4 19.3 236 267 216 248 94 103Standard Chartered 2.5 4.5 - - - - - - - -UBS -0.5 0.0 16.5 19.8 218 229 202 209 120 120United Overseas Bank 3.6 - - - - - - - - -SummaryMinimum -0.5 0.0 16.5 19.3 217 226 190 192 94 98Maximum 5.0 5.5 39.0 41.0 246 267 221 248 126 130Median 3.4 4.0 22.5 22.9 232 247 209 225 112 119Consensus 3.1 3.7 24.8 27.3 231 248 206 221 113 117History30 days ago 3.6 4.0 26.8 28.1 235 247 208 219 118 12060 days ago 3.8 4.0 28.5 32.7 234 243 206 211 125 12790 days ago 4.1 4.1 29.3 31.7 240 253 211 221 128 131

-

Current Account Trade Balance % of GDP USD bn

Int. ReservesUSD bnUSD bn USD bn

Exports Imports

3

4

5

6


2015 2016

-40

-20

0

20

40

2000 2005 2010 2015


100

120

140

160

180


2015 2016

31 | Current Account | % of GDP 32 | Trade Balance | USD billion 33 | Int. Reserves | months of imports

0

5

10

15

20

2000 2005 2010 2015


0

100

200

300

400

2000 2005 2010 2015

Trade BalanceImportsExports

0

5

10

15

20

2000 2005 2010 2015




April 2015

Malaysia in the Region

Population | %-share in Asia GDP | %-share in Asia

Fact Sheet

Malaysia1.9%

China60.6%

India12.3%

Korea8.0%

Indonesia5.0%

Other12.2%

Malaysia0.9%

China41.1%

India37.8%

Indonesia7.6%

Philippines3.0%

Other9.6%

Japan10.3%

U.S.A.8.1%

EU-2710.8%

Other Asia ex-Japan

14.6%

China15.1%

Singapore13.3%

Thailand6.0%

Other21.9%

Japan11.1%

U.S.A.8.6%

EU-278.7%

Other Asia ex-Japan

25.2%

Singapore13.8%

China13.2%

Thailand5.3%

Other14.2%

Other2.9%

Manufact. Products71.2%

Ores & Metals5.3%

Mineral Fuels12.1%

Food8.4%

Other5.5%

Manufact. Products63.7%

Mineral Fuels18.0%

Food12.8%

Trade Structure

Primary markets | share in %

Primary products | share in %

Economic Structure

GDP by Sector | share in % GDP by Expenditure | share in %

Exports

Exports

Imports

Imports

0

20

40

60

80

1002005-07 2008-10 2011-13

Net Exports

Investment

GovernmentConsumption

PrivateConsumption

0

20

40

60

80

1002005-07 2008-10 2011-13

Agriculture

Manufacturing

Other Industry

Services

General Data

Economic Infrastructure

Political Data

Long-term Foreign Currency Ratings

Strengths Weaknesses

• Competitive labor costs • Scarcity of qualified labor• Advanced financial sector • Vulnerability to external shocks• Net exporter of oil and gas • Low productivity

.

.

Energy (2012)Primary Energy Production (trillion Btu): 3,815Primary Energy Consumption (trillion Btu): 3,111Electricity Generation (billion kW-h): 127Electricity Consumption (billion kW-h): 118.5Oil Supply (thousand bpd): 696Oil Consumption (thousand bpd): 656CO2 Emmissions (million metric tons): 199

Agency Rating OutlookMoody’s: A3 PositiveS&P: A- StableFitch Ratings: A- Negative

Telecommunication (2013) Telephones - main lines (per 100 inhabitants): 15.3Telephones - mobile cellular (per 100 inhabit.): 145Internet Users (per 100 inhabitants): 67.0Broadband Subscriptions (per 100 inhabitants): 8.2

Transportation (2013) Airports: 114Railways (km): 1,849Roadways (km): 144,403Waterways (km): 7,200Chief Ports: Port Klang, Tanjug Pelepas

Official name: MalaysiaCapital: Kuala Lumpur (1.7 m)Other cities: Johor Bahru (1.4 m)

Kajang (0.8 m)Area (km2): 329,847Population (million, 2014 est.): 29.9Population density (per km2, 2014): 90.8Population growth rate (%, 2014 est.): 1.5Life expectancy (years, 2014 est.): 74.5Illiteracy rate (%, 2010): 6.9Language: Bahasa Malaysia,

EnglishMeasures: Metric systemTime: GMT+8

Prime Minister: Najib Tun RazakLast elections: 5 May 2013Next elections: 2018Central Bank Governor: Zeti Akhtar Aziz

FOCUSECONOMICS Calendar


April 2015

Economic Release Calendar

Date Country Event24 March China March HSBC Manufacturing PMI24 March Vietnam March Consumer Prices (**)25 March Korea Q4 2014 National Accounts25 March Taiwan Central Bank Meeting (**)26 March Korea March Consumer Confidence26 March Philippines Central Bank Meeting28 March Vietnam Q1 2015 National Accounts (**)28 March Vietnam March Industrial Production (**)30 March Korea April Business Confidence31 March Hong Kong February Retail Sales31 March Korea February Industrial Production31 March New Zealand March Business Confidence31 March Thailand February Manufacturing Production31 March Thailand February Merchandise Trade1 April China March Manufacturing PMI1 April Indonesia March HSBC Manufacturing PMI1 April Indonesia March Consumer Prices1 April Korea March HSBC Manufacturing PMI1 April Korea March Consumer Prices1 April Taiwan March HSBC Manufacturing PMI1 April Vietnam March HSBC Manufacturing PMI 2 April Hong Kong March HSBC PMI2 April India March HSBC Manufacturing PMI2 April Malaysia March Consumer Prices2 April Singapore March SIPMM Manufacturing PMI (**)2 April Thailand March Consumer Prices3 April Malaysia Febuary Merchandise Trade6 April India March HSBC Services PMI7 April Australia February Retail Sales7 April Australia Central Bank Meeting7 April India Central Bank Meeting7 April Philippines March Consumer Prices7 April Singapore Q1 2015 National Accounts (**)8 April Philippines February Exports8 April Taiwan March Merchandise Trade8 April Taiwan March Consumer Prices9 April Australia March Unemployment9 April China March Merchandise Trade (**)9 April Korea Central Bank Meeting10 April Australia April Consumer Confidence (**)10 April China March Consumer Prices10 April China March Producer Prices10 April China March New Yuan loans (**)

Calendar

FOCUSECONOMICS Calendar


April 2015

Economic Release Calendar

(*) Preliminary estimate. (**) Approximate date.

Date Country Event10 April China March Money Supply (M2) (**)10 April India February Industrial Production10 April India March Consumer Prices10 April Malaysia Febuary Industrial Production10 April Singapore Central Bank Meeting (**)14 April India March Wholesale Prices14 April Indonesia Central Bank Meeting14 April Indonesia February Retail Sales (**)15 April China Q1 2015 National Accounts15 April China March Industrial Production15 April China March Retail Sales15 April China March Fixed Asset Investment15 April Indonesia March Merchandise Trade15 April Philippines February OFW Remittances 17 April India March Merchandise Trade (**)17 April Singapore March Merchandise Trade 18 April China March Property Prices20 April Korea March Merchandise Trade20 April New Zealand April Business Confidence (**)20 April New Zealand Q1 2015 Consumer Prices21 April Hong Kong March Consumer Prices22 April Australia Q1 2015 Consumer Prices23 April China April HSBC Manufacturing PMI23 April Korea Q1 2015 National Accounts (*)23 April Singapore March Consumer Prices23 April Taiwan March Industrial Production24 April Korea April Consumer Confidence24 April Taiwan Central Bank Meeting (**)25 April Vietnam April Consumer Prices (**)

FOCUSECONOMICS


April 2015

Notes and Statements

PUBLICATION NOTE

Consensus forecasts are mean averages of projections of economic forecasters surveyed by FocusEconomics for our monthly publication. Quarterly averages may not correspond to the annual figures due to different forecast panels.

The GDP-weighted averages for the regional aggregates refer to economies surveyed by FocusEconomics on a monthly basis, and include the following countries:

Asia (16 countries): Brunei, Cambodia, China, Hong Kong, India, Indonesia, Japan, Korea, Laos, Malaysia, Myanmar, Philippines, Singapore, Taiwan, Thailand and Vietnam.Asia ex-Japan (15 countries): Brunei, Cambodia, China, Hong Kong, India, Indonesia, Korea, Laos, Malaysia, Myanmar, Philippines, Singapore, Taiwan, Thailand and Vietnam.Asean (Association of Southeast Asian Nations, 10 countries): Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar (Burma), Philippines, Singapore, Thailand and Vietnam.NIEs (Newly Industrialized Economies, 4 countries): Hong Kong, Korea, Singapore and Taiwan.

Weights are based on market exchange rates and reflect the latest forecasts on GDP growth, inflation and exchange rates.

COPYRIGHT NOTE

© Copyright 2015 FocusEconomics S.L. Duplication, reproduction, transmission, publication or redistribution in any form or by any means electronic, mechanical, or otherwise without prior written consent of FocusEconomics S.L. is strictly prohibited. Please cite source when quoting. All rights reserved under International Copyright Conventions.

The FocusEconomics Consensus Forecast Asia is a monthly publication of FocusEconomics. Communications to the Editor or FocusEconomics in general should be addressed as follows:

FocusEconomics S.L.Gran Via 657E-08010 BarcelonaSpaintel: +34 932 651 040fax: +34 932 650 804e-mail: [email protected] web: http://www.focus-economics.com

DISCLOSURE STATEMENT

The FocusEconomics Consensus Forecast Asia (“Forecast”) is based on information obtained from sources believed to be reliable. FocusEconomics and the participating panelists (“Information Providers”) do not guarantee that the information supplied in the Forecast is accurate, complete or timely. The Information Providers do not make any warranties with regard to the results obtained from the Forecast. The Information Providers are not responsible for any errors or omissions, or for any injuries or damages resulting from the use of this information, including incidental and consequential damages. Recipients should not regard the Forecast as a substitute for the exercise of their own judgement. The recommendations made in the Forecast may be unsuitable for investors depending on their specific investment objectives and financial position. The Forecast has been prepared solely for informational purposes and is not a solicitation of any transaction or an offer to enter into any transaction. Any opinions expressed in this report are subject to change without notice and the Information Providers are under no obligation to update the information contained herein.

Notes

ASIA PACIFIC |

CENTRAL AMERICA |& CARIBBEAN |

EASTERN EUROPE|

EURO AREA |

LATIN AMERICA|

MAJOR ECONOMIES |

MIDDLE EAST| & NORTH AFRICA|

NORDIC ECONOMIES|

Brunei, China, Cambodia, Hong Kong, India, Indonesia, Korea, Laos, Malaysia, Myanmar, Philippines, Singapore, Taiwan, Thailand, Vietnam, Australia & New Zealand

Belize, Costa Rica, Dominican Republic, El Salvador, Guatemala, Haiti, Honduras, Jamaica, Nicaragua, Panama, Puerto Rico and Trinidad & Tobago

Bulgaria, Croatia, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Russia, Slovakia, Slovenia, Turkey & Ukraine

Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Portugal, Slovakia, Slovenia & Spain

Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Mexico, Paraguay, Peru, Uruguay & Venezuela

G7 countries (United States, Canada, Japan, United Kingdom, France, Eurozone, Germany & Italy); BRIC overview (Brazil, Russia, India & China); Switzerland

Algeria, Bahrain, Egypt, Iran, Iraq, Israel, Jordan, Kuwait, Lebanon, Morocco, Oman, Qatar, Saudi Arabia, Tunisia, United Arab Emirates, Yemen; South Africa

Denmark, Finland, Iceland, Norway and Sweden

FocusEconomics Consensus Forecast reports cover economic forecasts for over 1,600 unique indicators in 95 countries. Every monthly report includes the Consensus Forecast for each indicator covered. The Consensus Forecast, based on an average of the forecasts provided by the most reputable economic research authorities in the world, is the one number you can rely on to make important business decisions.

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