The Malaysian economy slowed in 2013, expanding by 4.7%, after experiencing a 5.6% growth in 2012. according to the Department of Statistics Malaysia.
From 2002 to 2008, the economy enjoyed growth rates averaging 5.7%, but growth fell sharply to 1.5% in 2009, during the global financial crisis. In 2010, GDP growth bounced back, surging by 7.4%, and was followed by 5.1% growth in 2011.
The IMF’s forecast of 4.9% GDP growth in 2014, but the Malaysian Institute of Economic Research (MIER) predicts growth of 5.5%, while Bank Negara Malaysia (BNM) expects 5.1% GDP growth.
In recent months, inflation has been rising. From 1.34% in January 2013, inflation rose to 3.4% in January 2014. The recent price hikes were partly due to the fuel subsidy cuts implemented by the government in 2013, which raised prices of some petroleum products and eventually lead to an increase in consumer goods. BNM expects higher inflation in 2014, possibly exceeding the 3.2% long-term average.
The Overnight Policy Rate (OPR) has remained at 3% throughout 2013. However, it is likely to increase to 3.25% in Q4 2014, according to Edward Lee, Standard Chartered Bank Southeast Asia’s regional head of research.
Unemployment was 3% in December 2013, down from 3.2% in December 2012, and from 3.4% in the previous month, according to Department of Statistics Malaysia.
In the recent May 5, 2013 elections in Malaysia, the federal ruling Barisan Nasional (BN) coalition, dominated by Prime Minister Najib Razak’s party, United Malays National Organisation (UMNO), took over 60% of the parliamentary seats, despite getting only 47.38% of the popular vote. The opposition Pakatan Rakyat (PR) coalition led by Anwar Ibrahim failed to win majority of the seats even though it won 50.87% of the popular vote.
Anwar accused PM Razak and the Election Commission (EC) of electoral fraud, but if so, fraud seems to have carried the day.
