Malaysia 2012 growth above forecast

"Key contributors to this growth include expansionary fiscal policies and strong government support which have boosted investments and consumer spending," he said in statement here Friday.

He said investment has been very robust, growing at over 20 per cent in the third quarter supported by strong government support for infrastructure projects while private consumption also maintained strong growth in the third quarter, at 8.5 per cent.

"While we expect growth to moderate in this first quarter of 2013, supportive government policies in the development of talent and in technology adoption will continue to play a vital role in the development of Malaysia's long-term economic transformation and growth," said Azwan.

On the Asean front, its rapid-growth markets (RGMs) are on a high growth momentum, propelled by the Asean Economic Community (AEC).

RGMs have reduced trade barriers over the last 20 years, opening their economies to trade and the transfer of knowledge, he said.

Over the next decade, bilateral trade between the emerging Asian economies will continue to increase as demand rises for more sophisticated consumer products from their expanding middle-class markets.

Azwan said: "Malaysian companies have consistently focused on trade within the region, with many companies opting to expand their businesses into other emerging Asian economies, notably Indonesia and Vietnam.

"These strong business relationships will no doubt provide a significant base for propelling Malaysia's growth momentum.

"It also aligns well with the region's plans for an AEC aimed at transforming the region into a single market and production base by 2015."

Azwan said Malaysia, as an upcoming RGM, can expect continued strong demand for its commodities, and its favourable domestic market conditions will help buoy earnings growth in 2013.

"The country's financial resilience, a factor of her strong international reserves, high domestic liquidity and healthy flow of foreign investments into the country will drive Malaysia's economic transformation to be a developed country by 2020," he added.

Increasing intra-regional trade, easing of monetary and fiscal policies, and higher demand for commodities will lead to an improvement in the economic outlook for the RGMs in 2013, said Ernst & Young.