Malaysia's banking system rated stable by Moody's

Moody's gave a stable outlook for Malaysia's banking system in the next 12 to 18 months with its expansionary policies tosupport credit growth.

"Government spending this year will total 26 per cent of GDP, on commercial and fiscal projects that will attract private sector investment, and provide support to domestic business activities and employment,"said Moody's Analyst Simon Chenin.

"Moody's expects the Malaysian government's expansionary policies to support credit growth, despite a slowing economy due to lower demand for exports from the country's main trading partners -- the US, Europe and China," Chenin said.

Chen was speaking at the release of a new Moody's report, "Banking System Outlook: Malaysia", which is based on the central scenario that Malaysia's economy will grow at a slower, yet robust pace of 4.0 per cent this year, from 5.1 per cent last year.

"We expect loans to grow by between nine per cent and 11 per cent, which is slightly lower than the 14 per cent growth recorded in 2011," explains Chen.

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