Malaysia set for above-trend growth

Malaysia’s economy grew at a slightly slower pace at the start of the year, which surprised the consensus but was in-line with our view. Strengthening domestic demand should mean that growth picks up during the course of the year. Price pressures are already rising. The upshot is that we still expect more monetary tightening and see the policy rate reaching 3.5% by year-end, from 3.0% now.

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