Bank Negara Malaysia said the year-on-year growth eased
from 10.1 percent in the first quarter - the fastest expansion in a decade -
but remained robust, spurred by strong domestic and external demand.
"The domestic economy is expected to remain strong,
sustained by robust private sector demand,» the central bank said in a
statement.
Overall, the economy grew 9.5 percent in the first half
of the year and could exceed the official 6 percent target for the full year,
said Bank Negara Gov. Zeti Akhtar Aziz.
Economists said the second quarter growth in gross
domestic product beat market expectations but indicated the economy is
moderating amid global uncertainties.
"GDP has peaked in the first quarter and will be
slowing down further," said Wan Suhaimi Saidi, economist with Kenanga
Investment Bank. He forecast full year growth at 6.3 percent but may revise it
to 6.7 percent given the strong second quarter figure.
Manufacturing growth remained in the double digits, up
15.9 percent, slightly lower than 17 percent in the first quarter. The services
sector grew 7.3 percent, construction growth moderated to 4.1 percent and
agriculture to 2.4 percent Inflation crept up to 1.6 percent in the second
quarter from 1.3 percent in the previous three months, largely due to a rise in
the prices of food and drinks.
Wan Suhaimi said the slowdown in growth may prompt Bank
Negara to take a break from raising interest rates after three hikes since
March. But some economists believe there may be one last rate hike for the year
to curb inflation.
Zeti said current interest rates were "consistent
and appropriate to the outlook for growth and inflation." Policy makers
next meet on Sept 2 to decide on interest rates.
Bank Negara last raised its overnight policy rate - used
by commercial banks to set lending rates - in July to 2.75 percent, but this
still remains low compared to 2008 when it was 3.5 percent.
