KUALA LUMPUR, Malaysia--Malaysia's economic growth likely weakened slightly in the second quarter amid cautious domestic demand, economists said.
Malaysia's gross domestic product in the April-June period likely grew 5.4% from a year ago, according to a median forecast of 13 economists surveyed by The Wall Street Journal. That result would the first quarter growth has softened after accelerating for three straight months.
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Official data from Malaysia's central bank is due Friday.
Malaysia's economy grew at its fastest pace in two years at 5.6% from a year ago in the first three months of 2017, powered by strong domestic demand, higher exports and a rise in manufacturing activity. It had climbed 4.0% on-year in the second quarter of 2016.
"We believe improving external demand would be the key catalyst as evidenced in the double digit rise in nominal exports in the past seven months ," Dr. Mohd Afzanizam Abdul Rashid, chief economist at Kuala Lumpur-based Bank Islam Malaysia Bhd., told The Wall Street Journal on Wednesday.
"Having said that, domestic demand especially consumers will continue to exhibit a cautious stance with respect to spending," he said, and added that this could limit growth's momentum.
An improvement in data from Southeast Asia's third-largest economy since the start of 2017 has eased concerns about growth, which had been hit by weakness in oil prices since mid-2014. Figures released since January not only showed stronger exports, but also growth in industrial production.
But the economy has lost a bit of a steam lately. Official data released earlier this month showed Malaysia's exports grew slower than expected in June as gains in shipments of electrical goods and electronics were partly offset by a drop in exports of timber and refined petroleum products.
Also, imports of capital goods slowed markedly during the second quarter ended June, signaling that private investment growth could have slowed during the April-June period.
Malaysia's central bank projects Malaysia's economy will grow between 4.3% and 4.8% for 2017, beating the 4.2% expansion in 2016.
-- Write to Yantoultra Ngui at email@example.com
(END) Dow Jones Newswires
August 15, 2017 23:43 ET (03:43 GMT)