Malaysia 1Q GDP May Grow 4.5% On Year -Credit Suisse

Credit Suisse says Malaysia's GDP growth may stay robust in 1Q with +4.5% on-year growth, but slower than the +4.8% rate in 4Q10 on less favorable base effect. Sequential GDP may expand 1.8% on-quarter, it adds. The house says the weaker-than-expected March industrial production numbers (+2.4% on year vs +5.2% in February) and slower 1Q industrial production growth of 2.6% on-year vs +4.1% in 4Q "does not necessarily mean" weak GDP. "Although IP growth has a strong correlation with manufacturing GDP growth, its relationship with total real GDP growth is less strong, especially during periods when commodity prices are high," it says. Strong domestic demand will likely help keep real GDP growth robust, the house adds. The fall in commodity prices in recent months might weaken GDP growth in 2Q, but given prices are still at relatively high levels, CS says it is keeping its 2011 real GDP growth forecast at 5.6%.