Malaysian economy slows in 1st quarter

Flags of Malaysia’s ruling National Front coalition are seen, with the background of landmark Petronas Twin Towers, ahead of Sunday’s general elections in Kuala Lumpur, Saturday, May 4, 2013. Malaysia’s economy grew a solid but slower than expected 4.1 percent in the first quarter as weak manufacturing and mining dragged on overall performance, according to data announced Wednesday, May 14, 2013. AP PHOTO/VINCENT THIAN

KUALA LUMPUR—Malaysia’s economy grew a solid but slower than expected 4.1 percent in the first quarter as weak manufacturing and mining dragged on overall performance, according to data announced Wednesday.

The numbers from the central bank came on the heels of a 2012 fourth quarter in which Southeast Asia’s third-largest economy expanded by a surprising 6.4 percent, its best showing in more than two years.

The weak manufacturing and mining performance appeared to indicate that sluggish global demand had impacted Malaysia in the January-March quarter. Manufacturing growth was flat while mining declined slightly.

Meanwhile, more domestically driven sectors like services and construction showed solid growth.

“Growth will continue to be driven by domestic demand,” central bank governor Zeti Akhtar Aziz told a news conference, according to Dow Jones Newswires.

Domestic demand grew 8.2 percent in January-March compared with a year earlier.

During the quarter, Prime Minister Najib Razak had accelerated a push to pump money into the economy through investment drives and cash handouts to voters as he campaigned heavily for May 5 elections.

His Barisan Nasional (National Front) government, which has ruled Malaysia for 56 years, once again retained its hold on power in the election.

A poll by Dow Jones Newswires of 11 economists before the data came out yielded a median forecast for year-on-year gross domestic product growth in the first quarter of 5.0 percent.

Najib campaigned on his record of steady growth and a promise to turn Malaysia into a “high-income developed nation” by 2020 and had said in 2011 that annual growth of at least 6 percent was needed to achieve that.

Full-year 2012 growth was 5.6 percent.

One goal of the plan is to double per capita income to 48,000 ringgit ($16,000) by 2020.

The government has promised major infrastructure projects and financial market liberalization to attract foreign investment and boost growth.