Final 4Q 2013 GDP growth was +5.5% YoY and +6.1% seasonally adjusted QoQ (3Q 2013: + 5.8% YoY; +0.3% s.a. QoQ), faster than the advanced estimate of +4.4% YoY.

2014 growth forecast trimmed to +3.7% from +4.0% to take into account of the actual 2013 growth of 4.1%, which was better than our +3.6% estimate. Official real GDP growth forecast remains at +2.0% to +4.0%.

With growth largely a non-issue, Budget 2014 due today will focus on inclusive and sustainable economic development.

Final 4Q 2013 GDP higher than advance estimate. 4Q 2013 real GDP growth was +5.5% YoY (3Q 2013: + 5.8% YoY), faster than the advanced estimate of +4.4% YoY. The economy gained by seasonally adjusted +6.1% annualized QoQ (s.a 3Q 2013: +0.3% QoQ). By sectors, the better than expected growth lass quarter was attributed to stronger final readings for Manufacturing (+7.0% YoY vs. adv. estimate: +3.5% YoY) and Services (+5.9% YoY vs. adv. estimate: +5.5% YoY).

Powered by net external demand which surged by +37.8% YoY (3Q 2013: +4.6% YoY) on a sustained exports performance of +6.1% YoY (3Q 2013: +6.5% YoY) as imports growth eased to +2.5% YoY (3Q 2013: +6.8% YoY). Pickup in the global GDP in the 2H 2013 lifted NODX to key markets like China (4Q 2013: +26.3% YoY; 3Q 2013: +17.2% YoY) and the US (4Q 2013: +5.4%; 3Q 2013: -1.3%).

Amid mixed domestic demand as private consumption growth moderated (4Q 2013: +1.9% YoY; 3Q 2013: +2.7% YoY), government spending accelerated (4Q 2013: +13.9% YoY; 3Q 2013: +7.5% YoY) while gross fixed capital formation retreated (4Q 2013: -6.3% YoY; 3Q 2013: +4.4% YoY) on declines in investments in Machinery, Equipment & Softwares (4Q 2013: -10.2% YoY; 3Q 2013: +2.6% YoY) and Transport Equipment (4Q 2013: -29.5% YoY; 3Q 2013: +0.2% YoY).  

Source: Maybank Kim Eng Research - 21 Feb 2014