07/07/2011 (Bernama) - Malaysian Rating Corporation Bhd (MARC) has maintained Malaysia's gross domestic product growth target at 5.3 per cent for this year from 7.2 per cent last year.

"This conviction is predicated on the strength of domestic demand that is underpinned by private consumption which will remain the key driver of the economy amidst steady labour market conditions as well as easy access to credit," the rating agency said in its "Economic Research" report issued here Wednesday.

MARC said the stable labour market was reflected in the country's unemployment rate which has been on the decline, falling to 3.0 per cent in March as more jobs became available to the general public.

This is evidenced by the number of job vacancies which continued to rise to 568,717 in the first quarter of 2011, representing a 26.4 per cent year-on-year increase.

In the same vein, lending to the household sector remained strong, having expanded by 13.0 per cent year-on-year in May due to higher growth in credit cards, personal loans and passenger-car purchases, it said.

This backdrop implies that private consumption will continue to be well supported by easy access to credit.

In addition, double-digit growth in palm oil and SMR20 rubber prices (40.6 per cent and 51.0 per cent respectively) in the first four months of 2011 portends stable or even increased rural-area consumption.

"As such, we expect private consumption to grow at 5.8 per cent in 2011, a healthy albeit slower pace than the 6.6 per cent expansion seen in the preceding year," said MARC.

As for investment, indicators such as imports of investment goods, foreign direct investment and sales of commercial vehicles suggest that private investment will likely experience healthy growth this year.

Additionally, MARC said that the positive sentiment brought about by the Performance Management & Delivery Unit (Pemandu)'s efforts to accelerate private investment will likely be sustained in the near term.