Economic growth in Malaysia slowed in the third quarter but a cut in interest rates should not be required to boost activity, the central bank said on Thursday.
Gross domestic product grew by 5.8 percent in July-September compared with a year earlier, beating market forecasts for a 5.7 percent expansion but coming in below a revised 6.2 percent increase in the second quarter. The central bank said the economy would not need to lower interest rates to remain robust.
"Interest rate levels are still low and remain supportive of the economy and therefore unless new information comes in to show otherwise, this interest rate level is considered appropriate for the economy," central bank chief Zeti Akhtar Aziz told a news conference.
Some economists have said Malaysia may cut rates next year to support its economy as export growth slows and consumption weakens. Like other Asian exporting countries, Malaysia is expected to see its economy soften slightly due to higher interest rates and an expected moderation in export growth.
Higher rates have begun to weigh on Malaysian consumers, with car makers recording a slump in sales and retailers reporting fewer sales of luxury goods.
With annual inflation at a 15-month low of 3.1 percent in October, financial markets are speculating that rates could be headed lower to keep the economy motoring along. Inflation had hit a seven-year high of 4.8 percent in March.
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