Q3 GDP data in Malaysia, released today, were weaker than expected, as was the case with the figures from Thailand. Nevertheless, the big picture is the same in both countries. The expansion is shifting to a pace which can be sustained and there has not been any major deterioration in the outlook. Domestic demand is well-placed to ensure that GDP climbs at Malaysia’s trend rate in 2011. We still expect that the central bank (BNM) will lift policy rates next year to a higher level than the markets currently anticipate and that the ringgit will appreciate more sharply than consensus forecasts too.