KUALA LUMPUR, Feb 22 – The economy is recovering but at an uneven pace said RHB Research Institute following the release of last December’s leading economic indicators.

The research house said in a report yesterday that the country’s leading index, which provides an early signal as to the direction of the economy, had recovered only modestly in December 2011, after plunging in November and registering an uptick in October.

RHB also noted that the leading index was stagnant as compared with December 2010 and was at its lowest level in thirty months.

“This suggests that  the pace of economic (recovery) is still uneven, after showing some early signs of recovery in the second half of 2012 as indicated by the improvement in the leading index in September and October 2011,  in view of the uncertain global economic outlook,” said the report.

The leading index had edged up 0.4 per cent in December after falling 1.5 per cent in November and growing 1.7 per cent in October.

Real money supply and the Bursa Malaysia Industrial Index were up 0.2 and 0.1 per cent respectively as compared with November.

This was offset however by a pullback in approved housing permits of 0.1 per cent and a decline in expected manufacturing sales of also 0.1 per cent.

RHB noted that the lagging index confirmed that the economy grew at a slower pace in the fourth quarter at 5.2 per cent as compared with 5.8 per cent in the third quarter.

The growth in the lagging index had weakened to 0.2 per cent in December as compared with 0.6 per cent in November and 1.7 per cent in October.

RHB added that with the Eurozone pulling back from a brink of a meltdown, the global economy will likely escape a double dip recession.

Growth however will likely remain slow in the months ahead with demand for exports picking up in the second half of the year.

RHB also projects real GDP growth to slow down to 3.6 per cent in 2012, from 5.1 per cent in 2011.