Malaysian domestic economy likely to remain resilient

Malaysian domestic household consumption likely faces downside risks in Q2, although it should remain healthy. A breakdown of domestic consumption in 2014 indicates that support was broad-based: food consumption contributed 1.5ppt and utilities 1ppt to the 7% increase in household consumption. 

Transport, communication, recreation, restaurants and miscellaneous goods and services contributed a total of 4.1ppt. These sectors are expected to face slightly more downside risk from GST implementation, says Standard Chartered.

Structure investment was the main growth driver in Q1, contributing 7ppt to the 9.7% y/y increase in investment. Standard Chartered expects this to continue for the rest of the year as Malaysia improves its infrastructure. Machinery and equipment investment contributed 2.2ppt to investment growth.